South Africa’s Competition Commission has said that the proposed merger of Kumba Resources with Eyesizwe Coal might have anti-competitive consequences. ”The Commission has concluded that given the prevalence of cross-directorships amongst Anglo, Eyesizwe Coal and BHP Billiton, co-ordinated market conduct being sustained post-merger is reasonably likely.”
Kumba’s parent, Anglo American, plans to split the company in two. Its iron ore assets will be named Kumba Iron Ore, while its coal assets are to be combined with Eyesizwe Coal, within a newly-created company to be called Exxaro.
The Competition Commission has recommended that that transaction be approved, but with the following imposed conditions. Anglo American may not appoint a director, representative or nominee to the board of Exxaro or Eyesizwe. Nor will it be entitled to voting rights or be allowed to have access to ”sensitive business information” of the new companies.
Anglo itself has already been prevented by the authorities from taking full ownership of Kumba
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