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EDINBURGH — As the ANC ratchets up pressure on businesses to freeze job cuts, the pressure is being felt among leaders at state entities. The Competition Commission has said that the £150m Sibanye-Lonmin deal could be approved if Sibanye demonstrates that it will try to save about a quarter of the jobs it was planning to cut. The London-based Financial Times warns that the condition to preserve jobs is a tough one for Sibanye. The South African gold miner should offset some of the planned 3,000 redundancies after the merger by starting “three short-term mining projects,” the commission said in its statement. London-listed Lonmin has suffered as a result of years of falling platinum prices and rising labour costs. Sibanye has been highly acquisitive, buying US platinum and palladium miner Stillwater for in $2.2bn in 2016, says the FT. – Jackie Cameron
South Africa’s antitrust regulator recommended Sibanye Gold Ltd.’s acquisition of Lonmin Plc be approved, clearing a key hurdle for the deal that throws a lifeline to the struggling platinum producer.
The deal, expected to be completed later this year, will now go to the country’s Competition Tribunal for a final ruling. It may be approved if Sibanye tries to save about 3,700 jobs of the more than 13,000 it plans to cut over the next two years, the Competition Commission said on Monday.
Sibanye’s acquisition of Lonmin is the latest in a series of deals by Chief Executive Officer Neal Froneman, who has transformed the gold miner by expanding into platinum-group metals and last year bought a U.S. palladium miner for $2.2 billion. For Lonmin, the deal comes after the company struggled through years of losses and was forced to seek debt-covenant waivers from lenders.
Some jobs could be saved if platinum prices increase and the company is able to maintain production costs at certain shafts, the Competition Commission said in a statement. If platinum doesn’t recover, Sibanye may have to reduce jobs.
Shareholders may vote on the deal in December if the approval process is finalized by October, Froneman said last month.
The merger terms are “fair, reasonable and in the best interests of all stakeholders” Froneman said in a statement issued jointly with Lonmin. The transaction offers stability and ensures a positive future, he said.