South Africa’s Competition Appeal Court said Friday that Sibanye-Stillwater’s (JSE:SGL) (NYSE:SBGL) planned takeover of Lonmin (LON:LMI) could go ahead, clearing the way for shareholders to vote on the transaction that would create the world’s second-largest platinum producer.
The country’s Competition Tribunal had approved the deal in November last year, but Lonmin’s main mining union, the Association of Mineworkers and Construction Union (AMCU), filed an appeal to try to block it or have it re-examined. The move was an effort to avoid some of inevitable layoffs, originally estimated at 3,000, that will take place after the business combination.
“We welcome this decision as it clears the way towards the shareholder votes on 28 May,” Ben Magara, chief executive of Lonmin, said in the statement. “The combination creates a larger and more diversified company,which we believe is in the best interest of Lonmin shareholders and other stakeholders.”
The all-share offer has been considered a rescue deal for Lonmin, severely hit by weak platinum prices during the 2016-2017 downturn, costs related to the strengthening rand, a large labour force and expensive deep-level mines.
For Sibanye, is just one more of many deals struck by chief executive officer, Neal Froneman, who has transformed the gold miner by expanding its operations into the platinum-group metals sector.