Glencore International PLC v Xstrata PLC (33/LM/Mar12) [2013] ZACT 11; [2013] 1 CPLR 191 (CT) (6 March 2013)

Glencore International PLC v Xstrata PLC (33/LM/Mar12) [2013] ZACT 11; [2013] 1 CPLR 191 (CT) (6 March 2013)

The Tribunal found that the proposed merger between Glencore and Xstrata would not substantially prevent or lessen competition in any coal market in South Africa. The evidence showed that Eskom, the largest domestic coal consumer, would continue to have access to alternative suppliers, and the merged entity would not be able to unilaterally raise coal prices or restrict supply. The Tribunal also concluded that Eskom's concerns regarding coal supply and pricing were not merger-specific but reflected broader industry trends. Regarding employment, the Tribunal imposed conditions limiting the number of retrenchments and providing for a review period and retraining fund for affected employees....

Citation
[2013] ZACT 11
Parties
Applicant: Glencore International PLC; Respondent: Xstrata PLC; Respondent: Eskom Holdings SOC Limited; Respondent: National Union of Mineworkers (NUM); Respondent: National Union of Metalworkers of South Africa (NUMSA)
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
6 March 2013
Case Number
33/LM/Mar12
Procedural Posture
Large Merger Application / Conditional Approval After Hearing and Interventions
Outcome
Merger conditionally approved subject to employment-related conditions.
Judges
Norman Manoim, Andreas Wessels, Merle Holden
Legal Topics
Large Merger Review, Public Interest Conditions, Coal Market Delineation, Employment Retrenchment, Export Parity Pricing
Competition Law Commercial and Corporate Large Merger Review Public Interest Conditions Coal Market Delineation Employment Retrenchment Export Parity Pricing

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 3 Authorities cited 1 Party arguments 2 Amounts and remedies 4
Sign in to unlock

Parties

Glencore International PLC

Applicant

Xstrata PLC

Respondent

Eskom Holdings SOC Limited

Respondent

National Union of Mineworkers (NUM)

Respondent

National Union of Metalworkers of South Africa (NUMSA)

Respondent

Procedural Posture

Large Merger Application / Conditional Approval After Hearing and Interventions

Legal Issues

  1. 1 Whether the proposed merger between Glencore and Xstrata would substantially prevent or lessen competition in any coal market in South Africa.
  2. 2 Whether the merger raises substantial public interest concerns, particularly regarding employment and coal supply to Eskom.
  3. 3 Whether employment-related retrenchments resulting from the merger are justified and adequately mitigated.

Ratio Decidendi

The Tribunal found that the proposed merger between Glencore and Xstrata would not substantially prevent or lessen competition in any coal market in South Africa. The evidence showed that Eskom, the largest domestic coal consumer, would continue to have access to alternative suppliers, and the merged entity would not be able to unilaterally raise coal prices or restrict supply. The Tribunal also concluded that Eskom's concerns regarding coal supply and pricing were not merger-specific but reflected broader industry trends. Regarding employment, the Tribunal imposed conditions limiting the number of retrenchments and providing for a review period and retraining fund for affected employees....

Court Disposition

Merger conditionally approved subject to employment-related conditions.

Orders

  • The merger between Glencore International PLC and Xstrata PLC is approved subject to the employment-related conditions set out in Annexure A.
  • No more than 80 skilled employees may be retrenched as a result of the merger, with retrenchment commencing only after implementation.