Sibanye-Lonmin Deal Clears Key Hurdle With Antitrust Support
(Bloomberg) -- South Africa’s antitrust regulator recommended Sibanye Gold Ltd.’s acquisition of Lonmin Plc be approved, clearing a key hurdle for the deal that throws a lifeline to the struggling platinum producer.
The deal, expected to be completed later this year, will now go to the country’s Competition Tribunal for a final ruling. It may be approved if Sibanye tries to save about 3,700 jobs of the more than 13,000 it plans to cut over the next two years, the Competition Commission said on Monday.
Sibanye’s acquisition of Lonmin is the latest in a series of deals by Chief Executive Officer Neal Froneman, who has transformed the gold miner by expanding into platinum-group metals and last year bought a U.S. palladium miner for $2.2 billion. For Lonmin, the deal comes after the company struggled through years of losses and was forced to seek debt-covenant waivers from lenders.
Some jobs could be saved if platinum prices increase and the company is able to maintain production costs at certain shafts, the Competition Commission said in a statement. If platinum doesn’t recover, Sibanye may have to reduce jobs.
Shareholders may vote on the deal in December if the approval process is finalized by October, Froneman said last month.
The merger terms are “fair, reasonable and in the best interests of all stakeholders” Froneman said in a statement issued jointly with Lonmin. The transaction offers stability and ensures a positive future, he said.
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