MONDAY, 4.30PM
MULTINATIONAL conglomerate Lonrho has broken off merger negotiations with SA mining company Johannesburg Consolidated Investments, Lonrho announced in London on Monday.
The proposed merger would have created one of the world’s biggest mining companies, with interests in coal, gold, platinum and other precious metals, and combined assets of over $3-billion. Speculation that the deal was unravelling emerged last week when Lonrho said it was stepping up the pace of its disposal programme, in which it is selling off its non-mining assets. The company also announced last week that the proposed merger was turning out to be more complicated than expected.
The proposed merger had the support of Anglo American, South Africa’s largest mining house, which has a 14% stake in JCI. A merger would clear the way for Anglo to swap its 28% stake in Lonrho — which the European Union has declared should be reduced to less than 10% — for Lonrho’s 33% stake in Ghanaian gold producer Ashanti Gold Fields.
JCI confirmed in a statement issued in Johannesburg the talks had been discontinued, but said other transactions are being discussed.
“JCI Limited announces that it has discontinued talks with Lonrho plc about a possible merger. However, the company confirms that it has been approached to discuss other possible transactions which could unlock value for shareholders in both JCI Limited and Lonrho.”