Glencore / Xstrata Merger

Commission recommends conditional approval of Glencore/ Xstrata merger

On 22 October 2012 the Competition Commission (Commission) recommended that the Tribunal approve the acquisition of Xstrata Plc (Xstrata) by Glencore International Plc (Glencore), subject to employment-related conditions.

Before making its decision the Commission consulted with a number of parties that may be affected by the merger. These parties include Eskom, Sappi, the Department of Public Enterprises and the National Union of Mineworkers.

The Commission concluded that the merger is not likely to have a substantial impact on Eskom's operations since sales to Eskom are, in most cases, governed by long-term supply contracts that are typically tied to the life of a coal mine. After considering a number of factors including pricing trends, the Commission also concluded that all concerns raised by coal users could easily be addressed by various existing and proposed measures,