Harmony Gold Mining Company Limited and Gold Fields Limited (93/LM/Nov04) [2005] ZACT 29; [2005] 2 CPLR 484 (CT) (18 May 2005)

Harmony Gold Mining Company Limited and Gold Fields Limited (93/LM/Nov04) [2005] ZACT 29; [2005] 2 CPLR 484 (CT) (18 May 2005)

The Tribunal found that the merger would not substantially prevent or lessen competition in any market, as the gold market is fragmented and input supplier markets showed no credible evidence of harm. The evidence presented by Gold Fields regarding buyer power and supplier distress was found to be unreliable and unsupported by actual supplier submissions. The Tribunal rejected the argument that the merger would create systemic risk, finding no credible expert evidence or corroboration. Regarding public interest, the Tribunal accepted that merger-specific retrenchments would be limited to management and supervisory staff, with a cap of 1000, and imposed conditions to protect employment and...

Citation
[2005] ZACT 29
Parties
Applicant: Harmony Gold Mining Company Limited; Respondent: Gold Fields Limited
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
18 May 2005
Case Number
93/LM/Nov04
Procedural Posture
Large Merger Application / Final Decision and Reasons
Outcome
Merger approved subject to conditions.
Judges
D. Lewis, N. Manoim, Y. Carrim
Legal Topics
Large Merger Review, Public Interest Assessment, Employment Effects, Buyer Power, Market Definition, Efficiency Defence
Competition Law Commercial and Corporate Large Merger Review Public Interest Assessment Employment Effects Buyer Power Market Definition Efficiency Defence

Case Brief

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Parties

Harmony Gold Mining Company Limited

Applicant

Gold Fields Limited

Respondent

Procedural Posture

Large Merger Application / Final Decision and Reasons

Legal Issues

  1. 1 Whether the proposed hostile takeover by Harmony Gold Mining Company Limited of Gold Fields Limited is likely to substantially prevent or lessen competition in any market.
  2. 2 Whether the merger can or cannot be justified on substantial public interest grounds, particularly regarding employment effects.
  3. 3 Whether the merger will result in systemic risk to the gold mining sector or broader South African economy.

Ratio Decidendi

The Tribunal found that the merger would not substantially prevent or lessen competition in any market, as the gold market is fragmented and input supplier markets showed no credible evidence of harm. The evidence presented by Gold Fields regarding buyer power and supplier distress was found to be unreliable and unsupported by actual supplier submissions. The Tribunal rejected the argument that the merger would create systemic risk, finding no credible expert evidence or corroboration. Regarding public interest, the Tribunal accepted that merger-specific retrenchments would be limited to management and supervisory staff, with a cap of 1000, and imposed conditions to protect employment and...

Court Disposition

Merger approved subject to conditions.

Orders

  • No retrenchments of employees below Patterson grade C or equivalent as a result of the merger.
  • Up to a maximum of 1000 retrenchments permitted at or above Patterson grade C or equivalent as a result of the merger.