Goldfields Ltd v Harmony Gold Mining Company Ltd and Another (43/CAC/Nov04) [2004] ZACAC 5 (26 November 2004)

Goldfields Ltd v Harmony Gold Mining Company Ltd and Another (43/CAC/Nov04) [2004] ZACAC 5 (26 November 2004)

The Court held that the early settlement offer, together with Norilsk's irrevocable undertaking, would enable Harmony to exercise decisive influence over Gold Fields, particularly at the critical shareholders' meeting regarding the IAMGold transaction. This amounted to joint control exceeding 50% of the issued share capital, thus constituting a notifiable large merger under section 12 and 13A of the Competition Act. Exercising voting rights attached to these shares prior to approval would constitute unlawful implementation of the merger. The Tribunal had jurisdiction to grant interdictory relief to prevent such implementation. The harm to Gold Fields was objectively apprehended, as the...

Citation
[2004] ZACAC 5
Parties
Appellant: Gold Fields Limited; Respondent: Harmony Gold Mining Company Limited; Respondent: The Competition Commission
Court
Competition Appeal Court
Jurisdiction
South Africa
Judgment Date
26 November 2004
Case Number
43/CAC/Nov04
Procedural Posture
Civil Appeal / Appeal From Competition Tribunal Dismissal of Urgent Application for Interdict
Outcome
Appeal upheld; interim interdict granted restraining Harmony from exercising voting rights attached to shares acquired under the early settlement offer until merger approval.
Judges
Davis JP
Legal Topics
Large Merger Notification, Interim Interdict, Acquisition of Control, Implementation of Merger, Joint Control, Section 13a Competition Act
Competition Law Commercial and Corporate Large Merger Notification Interim Interdict Acquisition of Control Implementation of Merger Joint Control Section 13a Competition Act

Case Brief

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Parties

Gold Fields Limited

Appellant

Harmony Gold Mining Company Limited

Respondent

The Competition Commission

Respondent

Procedural Posture

Civil Appeal / Appeal From Competition Tribunal Dismissal of Urgent Application for Interdict

Legal Issues

  1. 1 Whether the early settlement offer and related undertakings constituted a notifiable large merger under the Competition Act.
  2. 2 Whether the Competition Tribunal had jurisdiction to grant interim interdictory relief to prevent implementation of the merger.
  3. 3 Whether the acquisition of 34.9% of shares together with Norilsk's undertaking amounted to joint control over Gold Fields.

Ratio Decidendi

The Court held that the early settlement offer, together with Norilsk's irrevocable undertaking, would enable Harmony to exercise decisive influence over Gold Fields, particularly at the critical shareholders' meeting regarding the IAMGold transaction. This amounted to joint control exceeding 50% of the issued share capital, thus constituting a notifiable large merger under section 12 and 13A of the Competition Act. Exercising voting rights attached to these shares prior to approval would constitute unlawful implementation of the merger. The Tribunal had jurisdiction to grant interdictory relief to prevent such implementation. The harm to Gold Fields was objectively apprehended, as the...

Court Disposition

Appeal upheld; interim interdict granted restraining Harmony from exercising voting rights attached to shares acquired under the early settlement offer until merger approval.

Orders

  • Harmony Gold Mining Company Limited is interdicted and restrained from voting or otherwise exercising any rights attached to shares in the share capital of Gold Fields Limited acquired pursuant to the early settlement offer or otherwise, pending final approval of the merger by the Competition Tribunal or Competition...
  • Harmony Gold Mining Company Limited is ordered to pay the costs of the appeal, including the costs of two counsel.