The Competition Tribunal gave the go-ahead on Tuesday for mining company Harmony’s hostile takeover of rival Gold Fields — provided it caps retrenchments arising from the merger at 1 000.
The figure includes contracted employees, and retrenchments have to be confined to management and supervisory posts, the tribunal said in a statement.
The new, merged entity will be obliged to report retrenchments to the Competition Commission on a quarterly basis, and outline the reasons for any retrenchments occurring within 24 months of the tribunal’s order.
”This will enable the commission to determine whether the retrenchments resulted from the merger or whether they arose from factors unrelated to the merger, such as changes in the macro-economic environment,” the statement said.
Conditions were imposed because the tribunal found the merger to hold potentially ”negative public-interest consequences”.
”The merger has accordingly been approved subject to conditions designed to ameliorate the public interest.”
The tribunal said it decided to approve Harmony’s bid since it is unlikely to result in a lessening of competition in the gold-mining industry.
Full reasons for the decision are to be handed down in 20 working days.
The tribunal heard six days of arguments since last Tuesday, during which Gold Fields asked for Harmony’s hostile bid to be stopped, or for strict conditions to be imposed.
Gold Fields asked the tribunal to take into account public-interest considerations such as job losses and the impact of the merger on the company’s empowerment commitments when making its decision.
It disputed Harmony’s ability to meet its commitment to retrenching no more than 1 500 workers, saying up to 7 100 jobs could be put at risk by Harmony’s stated objective of achieving savings of R1-billion a year.
Gold Fields also expressed concern about Harmony’s financial health, saying the merger could impact on the stability of the industry as a whole. — Sapa