International law firm Herbert Smith Freehills is advising long-standing client Lonmin plc on Sibanye-Stillwater's bid for Lonmin. Lonmin is a major mine-to-market producer of platinum group metals (PGMs). Its core operations are in South Africa, and it exports PGMs worldwide.
Sibanye-Stillwater owns and operates a mix of gold and PGM mines and projects throughout South Africa, Zimbabwe and the United States.
Both Parties are active in mining PGMs, and Lonmin is also active downstream smelting and refining its own ore and that of third parties. The deal takes place against Lonmin's challenging capital structure and liquidity concerns; and in a market that saw Gencor's 1996 bid for Lonrho (Lonmin's predecessor) blocked by the European Commission on competition grounds in 1996.
The Parties started pre-notification with the UK Competition and Markets Authority ("CMA") in late March 2018 and the CMA commenced its formal review in mid-May. The South Africa Competition Commission is also reviewing the deal (on public interest as well as competition grounds). The CMA examined whether the merger may lead to any horizontal unilateral, coordinated or vertical effects, and following a detailed review cleared the transaction at phase I without remedies.
Commenting on the clearance, partner Kyriakos Fountoukakos said "This is a really great result for a long-standing client and is another strong example of our successful work in the mining sector."
The firm's Brussels and London offices are advising on the transaction. The Competition team consists of partner Kyriakos Fountoukakos and senior associates Peter Rowland and Camille Puech in Brussels. The Corporate deal team consists of partners Stephen Wilkinson and Robert Moore, senior associate Lucy Robson and associates Imogen White and Rebecca Quillish in London. Teams from Finance and EPI in London were also involved in the overall deal.
The deal remains subject inter alia to clearance from the South Africa Competition Commission and shareholder approval.
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