THE merger between global commodities trader Glencore and mining company Xstrata on Tuesday received the go-ahead from the South African competition authorities when the Competition Tribunal conditionally approved the transaction.
The transaction had already been approved in several other jurisdictions, with only South Africa and China remaining. The $33bn deal will see Xstrata becoming a wholly owned subsidiary of Glencore after the commodity trader increased its interest in Xstrata from just more than 33% to 100%.
The competition authorities in South Africa expressed concern about possible job losses, but not about the effect of the transaction on competition. Conditions imposed by the tribunal were aimed at addresssing these public interest concerns.
It ruled that only 80 skilled workers and 100 unskilled and semi-skilled workers could be retrenched due to the merger. The retrenchment process may not go beyond two years after the merged entity received all of its antitrust approvals.
A training fund, administered by a training committee, has to be set up by the merged entity. The fund will allocate R10,000 to each affected worker for further training and development.
The tribunal also ordered that two representatives of the National Union of Mineworkers, which reached an agreement with the merging parties on possible retrenchments, be appointed to the training committee.
Eskom on Friday withdrew its application to intervene in the hearing. This followed a confidential agreement reached with Glencore pertaining to its future supply of coal for power generation at its Hendrina, Komati and Majuba power stations.
The National Union of Metalworkers also withdrew its application on Friday.