South Africa’s Competition Tribunal approved the takeover of Glencore’s Optimum coal unit by a company owned by the Gupta family and a venture fund in which President Jacob Zuma’s son is the biggest investor.
Tegeta Exploration & Resources agreed to buy Optimum for R2.15 billion ($142 million) in December after Glencore had placed the mine under business administration because it said it couldn’t make a profit due to the terms of a coal supply due with state power company Eskom Holdings. Tegeta is 64%-owned by Mabengela Investments, which in turn is 45%-held by Duduzane Zuma, according to people familiar with the matter. The Gupta family’s stake in the venture is held through Oakbay Investments.
The deal may proceed on condition that Tegeta “will not retrench any employees of the target firms as a result of the merger,” Oakbay said in an e-mailed statement on Tuesday. Optimum employs more than 3 000, it said.
Tegeta will supply no more than 5% of Eskom’s coal needs, Oakbay said.
Peter Grauer, chairman of Bloomberg LP, the parent of Bloomberg News, is a senior independent non-executive director at Glencore.
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