Minorco
and Consolidated Gold Fields plc
A report on the merger situation
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Summary
On 24 October 1988, the Secretary of State for Trade and
Industry requested the Commission to report on the acquisition
of Consolidated Gold Fields plc (Gold Fields) by Minorco.
We were required to investigate whether a merger situation
had already been created, as well as whether arrangements
in progress or contemplation would result in a merger situation
(see paragaph
3.1).
We have considered the evidence before us on the changes in
Minorco's shareholdings in Gold Fields in the six months before
the date of the reference, and have concluded that there is
not an existing merger situation.
As regards the proposed acquisition by Minorco of the shares
in Gold Fields which it does not already own, we conclude
that this proposed merger may be expected not to operate against
the public interest.
Gold Fields is a United Kingdom compajiy with overseas interests
in a number of major minerals enterprises; its subsidiary
ARC is also a leading supplier of aggregates and related products
in the United Kingdom. Minorco is a holding company incorporated
in Luxembourg with world-wide interests in companies primarily
concerned with natural resources; over 70 per cent of the
shares in Minorco are at present held by the Anglo American
group of South Africa and the Oppenheimer family.
We do not believe, as it was suggested to us, that the proposed
merger would operate against the public interest on account
of the characteristics of the Anglo American group, or Minorco's
South African associations in general. We do not accept, for
example, that Minorco would be under less pressure to perform
efficiently than any other company in its position.
We have considered the effects of the proposed merger on competition
in the world markets for a number of high value minerals and
metals. We do not believe that the merger will operate against
the United Kingdom public interest by reason of any effects
on the markets for gold or platinum. The Anglo American group
is not at present involved in the supply of titanium, zircon
or rare earths and we do not believe that the acquisition
by Minorco of Gold Fields' interests in Renison Goldfields
Consolidated, a main producer of these minerals, would significantly
increase the risk of collusion in these markets, given especially
the availability of other reserves of these minerals.
We also considered the effects on those markets in the United
Kingdom in which ARC operates but in which Minorco at present
has no involvement. These markets, for aggregates and related
products, have special characteristics such that a loss of
market share by ARC could have significant effects on competition
in local areas. We do not accept that the proposed acquisition
by
Minorco would seriously increase the risk of discrimination
against ARC by users of these products on account of Minorco's
South African associations, with such adverse effects on competition;
any action of this kind would, in the case of local authorities,
be illegal. We also do not believe that Minorco would be any
more likely than Gold Fields to encourage or condone anti-competitive
practices in these markets.
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