Tribunal approves Afrimat, Lafarge merger with conditions
The Competition Tribunal (“Tribunal”) has conditionally approved the proposed large merger wherein Afrimat Ltd (“Afrimat”) intends to acquire the entire issued share capital of Lafarge South Africa Holdings (Pty) Ltd (“Lafarge”). Post-merger, Afrimat will control Lafarge.
Proceedings
The Tribunal’s decision follows a merger hearing held on Friday, 5 April 2024, during which it heard submissions from the Competition Commission and the merging parties. This was preceded by the Tribunal hearing three intervention applications by: (i) Lenvalco Readymix (Pty) Ltd (“Lenvalco”); (ii) Letsoela Investment Holding Trust (“Letsoela”) and Nchakha Moloi N.O (“Nchakha”); and (iii) Ba Barolong Boo Tau Rapulana Community and the Barolong Boo Tau Rapulana Traditional Council (collectively referred to as “Ba Barolong Community”), respectively. Following the Tribunal’s hearing of the intervention applications, which were opposed by the merging parties, the Tribunal granted Lenvalco and Ba Barolong Community leave to participate in the merger proceedings. Letsoela and Nchakha’s intervention application was dismissed. Lenvalco and Ba Barolong Community subsequently withdrew their participation and the merger proceeded unopposed.
The merging parties
Afrimat, a public company listed on the Johannesburg Stock Exchange (“JSE”), controls several firms involved in the mining and construction markets. Afrimat operates five divisions, namely: (i) construction materials; (ii) industrial minerals; (iii) bulk commodities; (iv) mining services; and (v) future materials and metals. Relevant to the merger are Afrimat’s activities in the construction market where it is a producer and supplier of, among others, general aggregates and ready-mix concrete. Lafarge is, likewise, a producer and supplier of, among others, general aggregates and ready-mix concrete.
General aggregates are essential raw materials for various construction products such as ready-mix concrete, asphalt and cement. Ready-mix concrete is mainly used in large-scale civil engineering and infrastructure projects.
Conditions
The Tribunal has approved the merger subject to conditions involving, among others, a structural remedy which involves the merging parties divesting of various general aggregates quarries and ready-mix operations to HDP-owned firms. To address public interest concerns, the Tribunal has approved the merger subject to a three-year moratorium on merger-related retrenchments and other measures to protect employment. The conditions can be accessed via the Tribunal’s website at https://www.comptrib.co.za/case-detail/20477
The Tribunal’s reasons for its decision will be issued in due course.
Issued by:
Gillian de Gouveia, Communications Manager
On behalf of the Competition Tribunal of South Africa
Cell: +27 (0) 82 410 1195
E-Mail: GillianD@comptrib.co.za
Twitter: @comptrib
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