Lonmin Plc and Southern Platinum Corp (41/LM/May05) [2005] ZACT 49; [2005] 2 CPLR 531 (CT) (22 July 2005)

Lonmin Plc and Southern Platinum Corp (41/LM/May05) [2005] ZACT 49; [2005] 2 CPLR 531 (CT) (22 July 2005)

The Tribunal found that the merger would not substantially prevent or lessen competition in any of the relevant platinum group metals markets, as the increment in market share was low and significant competitors remained. The vertical integration did not raise foreclosure concerns, as Messina's refining and smelting volumes were insignificant and alternative arrangements were in place. The Tribunal was satisfied that the public interest concerns regarding retrenchments were adequately addressed by the agreed conditions, which included limiting the number of retrenchments, providing alternative skills training, and offering opportunities within the Lonmin Group. The unions representing...

Citation
[2005] ZACT 49
Parties
Applicant: Lonmin Plc; Respondent: Southern Platinum Corp
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
22 July 2005
Case Number
41/LM/May05
Procedural Posture
Large Merger Application / Conditional Approval
Outcome
Merger conditionally approved subject to public interest conditions regarding retrenchments and employee welfare.
Judges
Y Carrim, M Holden, M Madlanga
Legal Topics
Large Merger Review, Public Interest Conditions, Horizontal Merger Effects, Vertical Merger Effects, Retrenchment Conditions
Competition Law Commercial and Corporate Large Merger Review Public Interest Conditions Horizontal Merger Effects Vertical Merger Effects Retrenchment Conditions

Case Brief

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Parties

Lonmin Plc

Applicant

Southern Platinum Corp

Respondent

Procedural Posture

Large Merger Application / Conditional Approval

Legal Issues

  1. 1 Whether the proposed merger between Lonmin Plc and Southern Platinum Corp would substantially prevent or lessen competition in any relevant market.
  2. 2 Whether the merger raises public interest concerns, particularly regarding potential retrenchments and employee welfare.
  3. 3 Whether the merger would result in vertical foreclosure in the platinum group metals sector.

Ratio Decidendi

The Tribunal found that the merger would not substantially prevent or lessen competition in any of the relevant platinum group metals markets, as the increment in market share was low and significant competitors remained. The vertical integration did not raise foreclosure concerns, as Messina's refining and smelting volumes were insignificant and alternative arrangements were in place. The Tribunal was satisfied that the public interest concerns regarding retrenchments were adequately addressed by the agreed conditions, which included limiting the number of retrenchments, providing alternative skills training, and offering opportunities within the Lonmin Group. The unions representing...

Court Disposition

Merger conditionally approved subject to public interest conditions regarding retrenchments and employee welfare.

Orders

  • The maximum number of employees to be retrenched as a result of the merger shall not exceed 400, comprising approximately 284 semi-skilled employees and 116 management, artisan, supervisor, and administrator level employees.
  • At least a quarter of retrenched employees shall be shortlisted for appropriate positions within the Lonmin Group or elsewhere.