Randfontein Estates Ltd and Anglogold Ltd (03/LM/Jan01) [2001] ZACT 11 (19 April 2001)

Randfontein Estates Ltd and Anglogold Ltd (03/LM/Jan01) [2001] ZACT 11 (19 April 2001)

The Tribunal found that the relevant market is the international market for the production and supply of gold, where prices are determined externally and no single producer can influence them. Harmony Gold's post-merger share of world production would be only 5%, insufficient to exercise market power. Domestically, Harmony's market share would increase, but this would be offset by a reduction in Anglogold's share, and overall competition would not be substantially lessened. Regarding public interest, the Tribunal accepted evidence that job losses would be greater if the merger were prohibited, as the mines would be closed or downscaled more severely. No specific conditions were proposed...

Citation
[2001] ZACT 11
Parties
Applicant: Randfontein Estates Ltd; Respondent: Anglogold Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
19 April 2001
Case Number
03/LM/Jan01
Procedural Posture
Large Merger / Merger Clearance Decision
Outcome
Merger approved unconditionally.
Judges
N.M. Manoim, D.H. Lewis, D.R. Terblanche
Legal Topics
Large Merger Review, Market Definition, Public Interest Employment, Market Share Analysis
Competition Law Commercial and Corporate Large Merger Review Market Definition Public Interest Employment Market Share Analysis

Case Brief

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Parties

Randfontein Estates Ltd

Applicant

Anglogold Ltd

Respondent

Procedural Posture

Large Merger / Merger Clearance Decision

Legal Issues

  1. 1 Whether the merger between Randfontein Estates Ltd and Anglogold Ltd will substantially prevent or lessen competition in the relevant market.
  2. 2 Whether the merger raises significant public interest concerns, particularly regarding employment impacts.

Ratio Decidendi

The Tribunal found that the relevant market is the international market for the production and supply of gold, where prices are determined externally and no single producer can influence them. Harmony Gold's post-merger share of world production would be only 5%, insufficient to exercise market power. Domestically, Harmony's market share would increase, but this would be offset by a reduction in Anglogold's share, and overall competition would not be substantially lessened. Regarding public interest, the Tribunal accepted evidence that job losses would be greater if the merger were prohibited, as the mines would be closed or downscaled more severely. No specific conditions were proposed...

Court Disposition

Merger approved unconditionally.

Orders

  • The merger between Randfontein Estates Ltd and Anglogold Ltd is approved without conditions.
  • A Merger Clearance Certificate is issued.