Barrick Gold Corporation and Placer Dome Incorporated (118/LM/Dec05) [2006] ZACT 26 (24 March 2006)

Barrick Gold Corporation and Placer Dome Incorporated (118/LM/Dec05) [2006] ZACT 26 (24 March 2006)

The Tribunal found that although the merger would result in the creation of the largest gold producer globally, the international nature of the gold market and the fact that producers are price takers means that the merged entity would not have the ability to influence gold prices or substantially lessen competition. The combined market share of the merged entity in both production and reserves was not significantly higher than the shares held individually. No significant public interest issues were identified. Accordingly, the merger was approved.

Citation
[2006] ZACT 26
Parties
Applicant: Barrick Gold Corporation; Respondent: Placer Dome Incorporated; Respondent: Competition Commission
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
24 March 2006
Case Number
118/LM/Dec05
Procedural Posture
Large Merger / Merger Clearance
Outcome
Merger approved; no substantial prevention or lessening of competition or public interest concerns identified.
Judges
D Lewis, N Manoim, M Mokuena
Legal Topics
Large Merger Review, Market Share Analysis, Public Interest, Global Gold Market
Competition Law Commercial and Corporate Large Merger Review Market Share Analysis Public Interest Global Gold Market

Case Brief

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Parties

Barrick Gold Corporation

Applicant

Placer Dome Incorporated

Respondent

Competition Commission

Respondent

Procedural Posture

Large Merger / Merger Clearance

Legal Issues

  1. 1 Whether the merger between Barrick Gold Corporation and Placer Dome Incorporated will substantially prevent or lessen competition in the global gold market.
  2. 2 Whether there are any significant public interest concerns arising from the transaction.

Ratio Decidendi

The Tribunal found that although the merger would result in the creation of the largest gold producer globally, the international nature of the gold market and the fact that producers are price takers means that the merged entity would not have the ability to influence gold prices or substantially lessen competition. The combined market share of the merged entity in both production and reserves was not significantly higher than the shares held individually. No significant public interest issues were identified. Accordingly, the merger was approved.

Court Disposition

Merger approved; no substantial prevention or lessening of competition or public interest concerns identified.

Orders

  • The merger between Barrick Gold Corporation and Placer Dome Incorporated is approved.
  • No conditions are imposed on the approval.