The Competition Tribunal has conditionally approved the merger between Glencore International plc and Xstrata plc, which means the merger may be implemented in South Africa.
Although the Tribunal issued its order on 18 January, full reasons for its decision will only be given at a later date. Given the public interest in the merger, however, the Tribunal has issued a brief statement explaining the process and why it has made its decision.
“Following the conclusion of its investigation on 18 October 2012, the Competition Commission recommended that the Tribunal approve the merger subject to a condition relating to employment. However, no condition was recommended relating to competition issues.
“The Tribunal then invited interested parties to participate in its hearings. The National Union of Mineworkers intervened to address concerns about merger-related retrenchments.
“Eskom Limited intervened over concerns that the merger would lead to increased input costs for its coal needs. While Eskom did not oppose approval of the merger, it recommended that it be approved subject to conditions regulating the supply of coal to Eskom.
“The National Union of Metalworkers of South Africa intervened to support Eskom in its concerns, specifically the negative effect of higher electricity prices on (energy-intensive) industry in South Africa and workers employed by such industries.
“The merging parties did not oppose these parties intervening, but were opposed to the proposed coal supply conditions.
“At a pre-hearing on 16 November 2012, a timetable was agreed with the respective parties to provide for the hearing of witnesses. At a subsequent pre-hearing last year Eskom advised that it would not lead any witnesses, but that its competition concerns remained.”
