MONDAY, 11.30AM
JOHANNESBURG Consolidated Investments has initiated merger talks with UK multinational Lonrho, which could see the establishment of one of the biggest minig companies in the world, with assets worth more than $3-billion.
It is believed that the discussions were initiated by newly appointed JCI chairman Mzi Khumalo, as part of his plans for a massive expansion of the group. Sources close to the talks suggest that a possible deal has received the unofficial approval of Anglo American Corporation, which stands to gain through access to Lonrho’s platinum assets. Anglo could derive a longer-term benefit through realisation of control of Ghanaian Ashanti Gold Fields, which was recently stymied when the European Union blocked a proposed deal in which Anglo tried to buy a controlling 28% stake in Lonrho because of concerns that the deal would give Anglo inordinate of the world platinum market. The Lonrho deal would neatly sidestep the EU ruling by shifting Lonrho’s platinum assets in to the newly merged local entity.
JCI’s proposals are being developed by investment bank SBC Warburg, while Morgan Grenfell is looking after Lonrho’s interests in the proposed merger.
The JCI Lonrho development comes in the wake of last week’s bid for a stake in Gold Fields SA by New Africa Investments Limited, signifying profound restructuring of the SA mining industry.