Automated Summary
Key Facts
The Competition Tribunal of South Africa conditionally approved the merger between Royal Bafokeng Platinum Ltd (RBPlat) and Maseve Investments 11 (Pty) Ltd. Key conditions include employing 115 employees at Maseve's concentrator plant by 30 July 2018 and transferring 20 permanent mine employees under the Labour Relations Act. The Commission found the merged entity's post-merger market share for platinum and palladium would remain under 5%, with competition from major players like Anglo American Platinum. Retrenchments at both companies were partly merger-related but outweighed by job-savings at RBPlat's South Shaft operations.
Issues
- The Commission evaluated whether the proposed merger between Royal Bafokeng Platinum Ltd and Maseve Investments 11 (Pty) Ltd would substantially prevent or lessen competition in the relevant markets. It found that the combined post-merger market share of the merged entity would be less than 5%, and that competition would still be constrained by other significant players like Anglo American Platinum and Impala Platinum. The Commission also assessed the vertical relationship between the merging parties, concluding the transaction would not raise foreclosure concerns as Maseve's concentrator plant was used exclusively for its own purposes and RBPlat already has its own processing infrastructure.
- The Commission investigated the impact of the merger on employment, particularly after Maseve retrenched approximately 1,622 employees in 2017. It found that while the retrenchments at Maseve occurred during merger negotiations, they were primarily due to financial difficulties dating back to 2014-2016. The Commission concluded the merger would save jobs at RBPlat's South Shaft, which would otherwise face closure and retrenchment of 2,000 employees in 2018. As a condition, RBPlat was required to employ 115 former Maseve concentrator plant workers by 30 July 2018 and retain 20 permanent Maseve employees under no less favorable terms.
Holdings
- The Tribunal determined that the merger does not raise further public interest issues beyond those addressed by the conditions, particularly regarding job preservation at RBPlat's South Shaft operations and the non-operational status of Maseve's mine prior to the transaction.
- The Competition Tribunal of South Africa conditionally approved the proposed merger between Royal Bafokeng Platinum Ltd and Maseve Investments 11 (Pty) Ltd. The approval is subject to conditions outlined in Annexure A, including employment commitments for former Maseve employees and compliance with the Labour Relations Act.
- The Commission concluded that the merger is unlikely to substantially prevent or lessen competition in the platinum and palladium markets, as the combined post-merger market share of the merged entity is de minimis (less than 5%) and competition from other major players remains significant.
Remedies
- The Acquiring Firm must communicate position details to affected employees through SMS, email, or community notice boards (directly or via third-party providers). Affected employees must apply themselves for vacancies.
- The Acquiring Firm must employ 20 permanent employees from the Mine (named in Appendix I) within 30 days of the Plant Transaction implementation, maintaining their current terms under Section 197 of the LRA.
- If affected employees meet job criteria, the Acquiring Firm's HR department will facilitate their applications for vacant positions.
- The Acquiring Firm must inform affected employees of job opportunities at the Mine post-merger and give preference to qualified applicants among them over equally qualified non-affected employees.
- The Acquiring Firm is required to employ 115 employees at the Concentrator Plant by 30 July 2018. First preference will be given to the 115 employees previously employed at the concentrator plant. If these employees are unavailable, RBPlat will source from the local Rustenburg community under its recruitment policy.
Legal Principles
The Competition Tribunal of South Africa applied principles from the Competition Act 89 of 1998 and the Labour Relations Act (LRA) to assess the merger between Royal Bafokeng Platinum Ltd and Maseve Investments 11 (Pty) Ltd. The Tribunal evaluated whether the merger would substantially prevent or lessen competition, considering market shares and competitive dynamics in the platinum group metals (PGMs) industry. It also addressed employment conditions under the LRA, ensuring fair treatment of affected employees and compliance with merger-related obligations.
Cited Statute
- Competition Act
- Labour Relations Act
Judge Name
- Imraan Valodia
- Norman Manoim
- Andreas Wessels
Passage Text
- [20] From the above, the Commission was of the view that the proposed transaction would have positive effects on employment as it could save the remaining jobs at Maseve. The counterfactual put up by the Commission illustrated that absent the merger, RBPlat would not have access to Maseve's concentrator plant which would cause its South Shaft operations to close. The effect of such closure would be catastrophic as approximately 2000 employees at the South Shaft would be retrenched during 2018.
- [25] In light of the above, we concluded that the proposed transaction is unlikely to substantially prevent or lessen competition in any relevant market. In addition, no further public interest issues arise save for those adequately safeguarded by the conditions.
- 2.1 The Acquiring Firm shall employ 115 employees at the Concentrator Plant by 30 July 2018. First preference will be given to the 115 employees that were previously employed at the concentrator plant.