The Industrial Development Corporation (IDC) was ”disappointed but vindicated” by the Competition Tribunal’s decision to allow Anglo American Holdings Limited to take control of Kumba Resources, spokesperson Neo Sowazi said in a statement issued on Thursday.
The Competition Tribunal, chaired by David Lewis, met earlier in the day and approved the merger between Anglo American Holdings (”Anglo”) and Kumba Resources Ltd (”Kumba”) — subject to the condition that no person would simultaneously hold office as a director of both Kumba and Highveld Steel & Vanadium Corporation Ltd or of both Kumba and Scaw Metals Ltd.
The IDC opposed the merger saying the transaction should be prohibited on both competition and public interest grounds.
Sowazi said: ”As a result of the merger Anglo American, a foreign domiciled company with its main listing on the London Stock Exchange will control around 78% of South Africa’s iron ore.”
South Africa’s Competition Tribunal approved on Thursday the merger between Anglo American and Kumba Resources, subject to the condition that no person will hold office simultaneously as a director of both Kumba and Highveld Steel & Vanadium Corporation or of both Kumba and Scaw Metals.
The tribunal found that, provided the condition was included, the merger would not lead to a substantial lessening or prevention of competition and that it would not be justified to prohibit the merger on public interest grounds.
The IDC, having been allowed to participate in the proceedings as an intervener, opposed the merger.
It argued that the notification of merger was defective and that the transaction should be prohibited on both competition and public interest grounds.
In the reasons for its decision, the tribunal dealt with the jurisdictional points raised by the IDC, the impact of the merger on competition in the relevant product markets and public interest concerns raised by the IDC.
On the issue of jurisdiction the tribunal had to decide whether or not a series of transactions by Anglo, in which it purchased up to 34,9% of Kumba, amounted to an acquisition of control and was, therefore, notifiable to the competition authorities.
The IDC had also argued that the information submitted by Anglo in its merger notification was incomplete at the time and a nullity as a result.
The tribunal, however, found the merger had been adequately notified, constituted an acquisition of control and that the Competition Commission and Competition Tribunal have jurisdiction over the transaction. — Sapa-I-Net Bridge