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South African Competition Tribunal unconditionally approves merger of Kumba Resources and Eyesizwe Coal

The Competition Tribunal in South Africa has unconditionally approved a set of transactions known as Project Pangolin involving the restructuring of Kumba Resources, a mining company in South Africa in which Anglo American held a controlling interest. One part of Project Pangolin will involve a merger of Kumba's coal assets with those of Eyesizwe Coal as part of the creation of a new black-owned mining company to be known as Exxaro. Anglo American will own a minority interest in Exxaro and will have representation on Exxaro's board. The South African Competition Commission had recommended the approval of Project Pangolin, but only if Anglo American were prevented from having representation on Exxaro's board. Anglo American has its own interests in the coal industry in South Africa through Anglo Coal, and the Competition Commission expressed concern that the cross-directorship would facilitate tacit collusion in the sale of coal to domestic customers.

The Tribunal rejected the Commission's recommendation and approved the transaction without conditions. Robert Stillman and Rameet Sangha of CRA submitted an economic report explaining why tacit collusion was unlikely in this industry, and Dr Stillman was cross examined on CRA's report during a hearing before the Tribunal.

See Tribunal's reasons for decision

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