COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No: LM187Mar22
In the matter between:
ARM Bokoni Mining Consortium (Pty) Ltd Primary Acquiring Firm
And
Bokoni Platinum Mines (Pty) Ltd Primary Target Firm
: I Valodia (Presiding Member)
: T Vilakazi (Tribunal Panel Member)
Panel
: E Daniels (Tribunal Panel Member)
Heard on : 11 August 2022
Decided on : 11 August 2022
Order
Further to the recommendation of the Competition Commission in terms of section 14A(1)(b) of
the Competition Act, 1998 (“the Act”) the Competition Tribunal orders that-
1. the merger between the abovementioned parties be approved in terms of section
16(2)(b) of the Act subject to the conditions attached hereto as Annexure A; and
2. a Merger Clearance Certificate be issued in terms of Competition Tribunal rule 35(5)(a).
11 August 2022
Presiding Member
Prof. Imraan Valodia
Date
Concurring: Dr Thando Vilakazi and Mr Enver Daniels
Date : 11 August 2022
To : Bowman Gilfillan Attorneys
Case Number: LM187Mar22
ARM Bokoni Mining Consortium (Pty) Ltd And Bokoni Platinum
Mines (Pty) Ltd
You applied to the Competition Commission on 25 February 2022
for merger approval in accordance with Chapter 3 of the
Competition Act.
Your merger was referred to the Competition Tribunal in terms of
section 14A of the Act, or was the subject of a Request for
consideration by the Tribunal in terms of section 16(1) of the Act.
After reviewing all relevant information, and the recommendation
or decision of the Competition Commission, the Competition
Tribunal approves the merger in terms of section 16(2) of the Act,
for the reasons set out in the Reasons for Decision.
This approval is subject to:
no conditions.
x the conditions listed on the attached sheet.
The Competition Tribunal has the authority in terms of section 16(3)
of the Competition Act to revoke this approval if
a) it was granted on the basis of incorrect information for which
a party to the merger was responsible.
b) the approval was obtained by deceit.
c)a firm concerned has breached an obligation attached to
this approval.
The Registrar, Competition Tribunal
Notice CT 10
About this Notice
This form is prescribed by the Minister of Trade and Industry in terms of section 27 (2) of the Competition Act 1998 (Act No. 89 of 1998).
Contacting
the Tribunal
The Competition Tribunal
Private Bag X24
Sunnyside
Pretoria 0132
Republic of South Africa
tel: 27 12 394 3300
fax: 27 12 394 0169
e-mail: ctsa@comptrib.co.za
Merger Clearance Certificate
This notice is issued in
terms of section 16 of
the Competition Act.
You may appeal
against this decision to
the Competition
Appeal Court within 20
business days.
ANNEXURE A
ARM BOKONI MINING CONSORTIUM (PTY) LTD
AND
BOKONI PLATINUM MINES (PTY) LTD
CASE NUMBER: LM187Mar22
CONDITIONS
1.DEFINITIONS
The following terms have the meaning assigned to them below, and cognate expressions have
corresponding meanings –
1.1"Acquiring Firm" means ARM Bokoni Mining Consortium (Pty) Ltd, a private company incorporated
in accordance with the laws of South Africa, with registration number 2014/269188/07;
1.2 "Approval Date" means the date referred to on the Competition Tribunal's Merger Clearance
Certificate (Form CT 10), being the date on which the Merger is approved in terms of the
Competition Act;
1.3 "B-BBEE" means Broad-Based Black Economic Empowerment as defined in the B-BBEE Act;
1.4 "B-BBEE Act" means the Broad-Based Black Economic Empowerment Act, 53 of 2003, as
amended;
1.5 “Black Industrialists” means “Black Persons” as defined in the B-BBEE Act identified by the
Acquiring Firm to hold shares in the Black Industrialists SPV;
1.6 "Black Industrialists SPV" means a special purpose vehicle which will be owned by Black
Industrialists that will hold a shareholding of 5% in the Acquiring Firm;
1.7"Bokoni Mine" means the mine known as “Bokoni Platinum Mine" operated by the Target Firm;
1.8 "Bokoni Mine's Retrenched Employees" means all the employees retrenched by the Target
Firm in 2017 due to the Bokoni Mine being placed under care and maintenance;
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1.9 "Care and Maintenance Employees" means the current fixed-term contract care and
maintenance employees of Bokoni Mine, whose contracts are due to expire on 30 June 2022 and
are likely to be extended for a further period of up to six months, until 31 December 2022;
1.10 "Commission" means the Competition Commission of South Africa, a statutory body established
in terms of section 19 of the Competition Act;
1.11Commission Rules" means the Rules for the Conduct of Proceedings in the Commission;
1.12 "Competition Act" means the Competition Act, 89 of 1998, as amended;
1.13 "Conditions" means the conditions set out in clauses 3 and 4 herein, and "Condition" means,
as the context requires, any one of them;
1.14 "Days" means any calendar day other than a Saturday, a Sunday or an official public holiday in
South Africa;
1.15 "Employees" means the permanent employees (as contemplated under the Labour Relations
Act) of the Target Firm, which shall include Workers, and "Employee" means, as the context
requires, any one of them;
1.16 "ESOP SPV" means an employee share ownership plan to be implemented through an employee
trust, that will acquire a shareholding of 5% in the Acquiring Firm and in terms of which Qualifying
Employees shall be beneficiaries thereunder;
1.17 "Implementation Date" means the date occurring after the Approval Date, on which the Merger
is implemented by the Merging Parties, which date is defined as the 'Closing Date' under the
SPA;
1.18 "Labour Relations Act" means the Labour Relations Act, 66 of 1995, as amended;
1.19 "Local Community SPV" means a community special purpose vehicle through which host
communities of the Bokoni Mine will benefit from a shareholding of 5% in the Acquiring Firm;
1.20 "Merged Entity" means the Target Firm subject to control of the Acquiring Firm following the
Implementation Date;
1.21 "Merger" means the proposed acquisition by the Acquiring Firm of all of the shares in the Target
Firm;
1.22 "Merging Parties" means the Acquiring Firm and the Target Firm;
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1.23 "Qualifying Employees" means unskilled and semi-skilled Employees, and will exclude
management and executive Employees;
1.24 "South Africa" means the Republic of South Africa;
1.25 "SPA" means the sale and purchase agreement entered into between Rustenburg Platinum
Mines Limited, Bokoni Platinum Holdings Proprietary Limited, Plateau Resources Proprietary
Limited, African Rainbow Minerals Limited and the Acquiring Firm on or about 17 December 2021
in terms of which, inter alia, Bokoni Platinum Holdings Proprietary Limited has agreed to sell all
of its shares, constituting 100% of the issued shares in the Target Firm, and all of its claims
against the Target Firm, to the Acquiring Firm;
1.26 "SPVs" means, collectively, the Black Industrialists SPV, the ESOP SPV and the Local
Community SPV;
1.27 "Target Firm" means Bokoni Platinum Mines (Pty) Ltd, a private company incorporated in
accordance with the laws of South Africa, with registration number 2007/016001/07;
1.28 "Tribunal" means the Competition Tribunal of South Africa, a statutory body established in terms
of section 26 of the Competition Act;
1.29 "Tribunal Rules" means the Rules for the Conduct of Proceedings in the Tribunal; and
1.30 "Workers" means Employees, and, in the context of ownership, refers to ownership by a broad
base of Employees
2.RECORDAL
2.1. On 25 February 2022, the Commission received notice of a large merger whereby the Acquiring
Firm intends to acquire the entire issued share capital of the Target Firm (the "Proposed
Transaction"). Following its investigation of the Merger, the Commission found that the
Proposed Transaction is unlikely to substantially prevent or lessen competition in any market in
South Africa.
2.2. In relation to public interest, the Merging Parties submit that the Bokoni Mine was placed under
care and maintenance in 2017 due to several years of significant cash losses under difficult
market conditions. As a result, the Bokoni Mine's Retrenched Employees were retrenched.
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2.3. Post-Merger the Merging Parties anticipate that the re-operating of Bokoni Mine will create
significant employment opportunities as detailed further in the Conditions.
2.4. Regarding the greater spread of ownership, the Merging Parties submit that as a result of the
Merger, a Local Community SPV, an ESOP SPV and a Black Industrialist SPV will be
established and will each acquire 5% of the ordinary shares of the Acquiring Firm for a nominal
price.
2.5. Moreover, the Merging Parties submit that, subject to the outcome of a feasibility study to be
conducted by the Acquiring Firm, the Merger is likely to result in the reoperating of Bokoni Mine
and the creation of a significant amount of employment opportunities in South Africa, estimated
to be approximately 5000 employment opportunities, of which approximately 2500 will be
permanent.
2.6. The Commission requested that the Merger be approved subject to certain Conditions to
address the above public interest commitments and to give first preference of employment to
the Care and Maintenance Employees, which the Merging Parties have agreed to.
3.BROAD-BASED BLACK ECONOMIC EMPOWERMENT CONDITION
3.1. Within 36 (thirty-six) months of the Implementation Date, the Merged Entity shall finalise and
implement the structures of the following:
3.1.1. the ESOP SPV;
3.1.2. the Local Community SPV; and
3.1.3. the Black Industrialists SPV.
3.2.The ESOP SPV structure shall be finalised in accordance with the following principles:
3.2.1. the ESOP SPV will be a trust established for the benefit of Qualifying Employees;
3.2.2. the Trust shall have a board of trustees as follows: the Merged Entity and the Workers
shall appoint an equal number of trustees. In addition, the Workers shall be entitled to
appoint 1 (one) independent chairperson with the prior written approval of the Merged
Entity;
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3.2.3. all Qualifying Employees shall be eligible for participation, and maternity leave will
have no adverse impact on the qualifying criteria;
3.2.4. the ESOP SPV shall acquire a shareholding of 5% in the Acquiring Firm for a nominal
consideration and on an unencumbered basis. For the avoidance of doubt, Qualifying
Employees will not be required to pay any monies to participate in the ESOP SPV and
the nominal consideration required to purchase shareholding in the Acquiring Firm
shall be advanced to the ESOP SPV by ARM or ARM Platinum and shall not be in the
form of a loan;
3.2.5. as an ordinary shareholder, the ESOP SPV, like all the other ordinary shareholders of
the Acquiring Firm, will be entitled to receive dividends in respect of its ordinary shares
in the Acquiring Firm once the Acquiring Firm is able to declare ordinary dividends to
its ordinary shareholders; and
3.2.6. the ESOP SPV will, in addition to its ordinary shares in the Acquiring Firm, subscribe
for a separate class of shares in the Acquiring Firm that will entitle the ESOP SPV to
a trickle dividend pending the declaration and payment of ordinary dividends. The
trickle dividend will start to accrue from the year that the Target Firm achieves its first
PGM concentrate sales. The accrued values will accumulate in favour of the ESOP
SPV over a 5 (five) year cycle and become payable to Qualifying Employees, via the
ESOP SPV, at the end of the fifth year of each cycle.
3.3. The Local Community SPV structure shall be finalised in accordance with the following
principles:
3.3.1. the Local Community SPV will be a non-profit company established for the benefit of
host communities of the Bokoni Mine that will be eligible for participation;
3.3.2. the Local Community SPV shall acquire a shareholding of 5% in the Acquiring Firm
for a nominal consideration and on an unencumbered basis. For the avoidance of
doubt, eligible host communities will not be required to pay any monies to participate
doubt, eligible host communities will not be required to pay any monies to participate
in the Local Community SPV and the nominal consideration required to purchase
shareholding in the Acquiring Firm shall be advanced to the Local Community SPV by
ARM or ARM Platinum and shall not be in the form of a loan;
3.3.3. as an ordinary shareholder, the Local Community SPV, like all the other ordinary
shareholders of the Acquiring Firm, will be entitled to receive dividends in respect of
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its ordinary shares in the Acquiring Firm once the Acquiring Firm is able to declare
ordinary dividends to its ordinary shareholders; and
3.3.4. the Local Community SPV will, in addition to its ordinary shares in the Acquiring Firm,
subscribe for a separate class of shares in the Acquiring Firm that will entitle the Local
Community SPV to a trickle dividend pending the declaration and payment of ordinary
dividends. The trickle dividend for the Local Community SPV will be paid effective
from the first fully completed financial year after the Implementation Date of the
Proposed Transaction until the Acquiring Firm is able to declare ordinary dividends to
its ordinary shareholders.
3.4. The Black Industrialist SPV structure shall be finalised in accordance with the following
principles:
3.4.1. the Black Industrialists SPV will be a private company owned by Black Industrialists.
The board of directors of the Black Industrialist SPV will include representatives of the
Black Industrialist shareholders;
3.4.2. the Black Industrialists SPV shall acquire a shareholding of 5% in the Acquiring Firm
for a nominal consideration and on an unencumbered basis. For the avoidance of
doubt, the Black Industrialists will only pay a nominal consideration to acquire shares
in the Black Industrialists SPV; and
3.4.3. as an ordinary shareholder, the Black Industrialists SPV, like all the other ordinary
shareholders of the Acquiring Firm, will be entitled to receive dividends in respect of
its ordinary shares in the Acquiring Firm once the Acquiring Firm is able to declare
ordinary dividends to its ordinary shareholders.
3.5. Prior to issuing any shares in the Acquiring Firm to the ESOP SPV, Local Community SPV and
Black Industrialists SPV, the Merged Entity shall provide the Commission with (i) copies of the
trust deed (in the case of the ESOP SPV) or memorandum of incorporation (in the case of the
Local Community SPV and Black Industrialists SPV) of the relevant SPV and (ii) the terms of
Local Community SPV and Black Industrialists SPV) of the relevant SPV and (ii) the terms of
the shares in the Acquiring Firm to be issued to such SPV (such documents in relation to a SPV,
collectively, the “SPV Documents”), and the following process shall apply:
3.5.1. in the event that the Commission (acting reasonably) takes the view that the proposed
structure of the ESOP SPV, Local Community SPV or Black Industrialists SPV
established (or to be established) by the Merged Entity in terms of the SPV Documents
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is not in compliance with the principles set out in this Condition in relation to such SPV,
the following process shall apply:
3.5.1.1. the Commission shall within 60 (sixty) Days of receipt of the SPV Documents relating
to the relevant SPV deliver a written notice to the Merged Entity setting out in
reasonable detail such non-compliance (Non-Compliance Notice);
3.5.1.2. the Merged Entity and the Commission shall thereafter take reasonable steps to
engage with each other regarding the alleged non-compliance;
3.5.1.3. in the event that any non-compliance with the principles set out in this Condition is
established in relation to the structure of a SPV, the Merged Entity shall as soon as
reasonably practicable thereafter take reasonable steps to remedy such non-
compliance and deliver a written notice to the Commission informing the Commission
regarding the steps taken to remedy such non-compliance (a "SPV Compliance
Notice"); and
3.5.1.4. if the Commission acting reasonably is of the view that the proposed revised structure
of the relevant SPV is still not in compliance with the principles set out in this
Condition, the Commission shall within 14 (fourteen) Days of receipt of the SPV
Compliance Notice, provide the Merged Entity with a new Non-Compliance Notice, in
which circumstances the process set out in paragraphs 3.5.1.1 to 3.5.1.4 (as
applicable) shall apply again.
3.6. In the event that the Commission fails to issue a Non-Compliance Notice within the timeframe
contemplated in paragraph 3.5.1.1 or 3.5.1.4 (as applicable), the Merged Entity shall be entitled
to proceed to implement the proposed structures of the ESOP SPV, Local Community SPV
and/or Black Industrialists SPV as set out in the SPV Documents and (if applicable) the SPV
Compliance Notice.
4.EMPLOYMENT CONDITION
4.1. For a period of 24 (twenty-four) months after the Implementation Date, the Merged Entity shall
give first preference to the Care and Maintenance Employees for any vacancies within the
give first preference to the Care and Maintenance Employees for any vacancies within the
Merged Entity, provided that the Care and Maintenance Employees have the requisite
qualifications, skills, know-how and experience for those specific vacancies, at all times subject
to the Merged Entity's employment equity plan and transformation requirements.
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4.2. The Merged Entity shall take reasonable steps to maintain a database of the names and contact
details of all Care and Maintenance Employees and, should any vacancies arise within the
Merged Entity, undertakes to communicate available vacancies to the Care and Maintenance
Employees through their last known contact details such as email and/or cell phone numbers,
amongst others, for a period of 24 (twenty-four) months after the Implementation Date, for
purposes of clause 4.1.
5.MONITORING OF COMPLIANCE WITH THE CONDITIONS
5.1. The Merged Entity shall inform the Commission in writing of the Implementation Date within 5
(five) Days of the Implementation Date.
5.2. The Merging Parties shall circulate a copy of the Conditions to their employees in South Africa,
the Care and Maintenance Employees and/or their respective representatives within 5 (five)
Days of the Approval Date.
5.3. The Merging Parties shall advise the Care and Maintenance Employees and/or their respective
representatives of the Condition in clause 4, within 10 (ten) Days of the Approval Date and shall
make a non-confidential copy of such Condition available to all Care and Maintenance
Employees and/or their respective representatives.
5.4. As proof of compliance thereof, the Merging Parties shall within 10 (ten) Days of circulating the
Condition in clause 4 as required in clause 5.2, provide the Commission with an affidavit by a
director employed by each of the Merging Parties attesting to the circulation of such Condition
and attach a copy of the notice sent and/or published.
5.5. The Merged Entity shall, within 10 (ten) Days of the Implementation Date, provide the
Commission with an affidavit which provides the total number of Care and Maintenance
Employees that are employed by the Target Firm in South Africa as at the Approval Date. The
affidavit referred to herein must be attested to by a senior official of the Merged Entity.
affidavit referred to herein must be attested to by a senior official of the Merged Entity.
5.6. The Merged Entity shall, within 30 (thirty) Days of each anniversary of the Implementation Date
for a period of 36 (thirty-six) months from the Implementation Date, provide to the Commission
a report detailing its compliance with the Conditions. This report shall be accompanied by an
affidavit attested to by a senior official of the Merged Entity, confirming the accuracy of the
report.
5.7. The Merged Entity shall, annually following the approval of the Merger until the SPVs are
implemented, provide to the Commission a report detailing the steps taken to implement the
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SPVs and the progress made in that regard. This report shall be accompanied by an affidavit
attested to by a senior official of the Merged Entity, confirming the accuracy of the report.
5.8. The Merged Entity shall inform the Commission of the implementation date of the SPVs
contemplated in clause 3 above within 10 (ten) Days of the implementation of such SPVs.
5.9. The Commission may request additional information from the Merging Parties, which the
Commission may reasonably deem necessary for the purposes of monitoring the extent of
compliance with the Conditions.
5.10. Any person, including any Care and Maintenance Employees (and any employees of the
Acquiring Firm), who believes that the Merging Parties have not complied with or have acted in
breach of the Conditions may approach the Commission.
6.APPARENT BREACH
In the event that the Commission discovers that there has been an apparent breach of these
Conditions, this shall be dealt with in terms of Rule 37 of the Tribunal Rules read together with
Rule 39 of the Commission Rules.
7.VARIATION
The Merging Parties or the Commission may at any time, on good cause shown and on notice to
the other, apply to the Tribunal for any of the Conditions to be waived, relaxed, modified and/or
substituted.
8.GENERAL
All correspondence in relation to the Conditions must be submitted to the following e-mail
address: mergerconditions@compcom.co.za and ministry@thedtic.gov.za.