Precious metals producer Sibanye-Stillwater said on Tuesday it remained fully committed to a takeover of platinum miner Lonmin after South Africa’s competition watchdog imposed conditions on the deal.
On Monday, the competition watchdog gave the green light to the all-share transaction as it did not prevent or lessen competition in platinum markets but placed conditions because it raised “significant public interest concerns”.
Sibanye and Lonmin said in a joint statement they remained fully committed to the deal, which is expected to close by the end of the year.
“The positive recommendation by the Commission to the (Competition) Tribunal is pleasing and on terms which we believe are fair, reasonable and in the best interest of all stakeholders,” Sibanye’s chief executive Neal Froneman said in the statement.
The commission said Sibanye should embark on three short-term mining projects to avoid the loss of over 3 000 jobs, subject to platinum prices rising and costs being kept low.
It also had to implement an agricultural initiative subject to its economic viability, keep Lonmin’s existing contracts with black-owned suppliers and maintain Lonmin’s black-ownership supply deal with the Bapo ba Mogale community.
Froneman told Reuters in May that shareholders might not find the Lonmin deal attractive if the Commission imposed tough conditions.
“Given the positive recommendation by the Commission I don’t expect there to be any more problems. It mostly looks like a done deal,” said Shore Capital analyst Yuen Low.
It is now up to the Competition Tribunal, which makes the final ruling on deals, to decide whether to accept the Commission’s recommendations.