Competition
law abused by firms - 17 June
There is growing abuse of competition law by both firms and
competition authorities, law firm Webber Wentzel said on
Wednesday. According to Daryl Dingley, partner in competition law
at Webber Wentzel, this was often driven by interest groups at the
competition authorities. "This manifests in the adoption of
blanket approaches to certain business arrangements irrespective
of whether these arrangements are credible responses to firm or
market conditions. "For example, in the investigations into
food and the steel sectors, the competition authorities are
attempting to have import parity pricing prohibited as they regard
such domestic pricing as indicative of collusion between domestic
suppliers or an abusive practice by a dominant domestic
supplier", Dingley said. - Business
Report website
Bread
and the sticky question of cartels - 23 June
When all the players in the widget market play follow-the-leader,
are they necessarily running a widget cartel? The answer is easy
in theory, but often complex in practice. In theory, a cartel
exists only if the players are conspiring to cut or raise prices
together - or in the words of the Competition
Act, only if there is an "agreement or
understanding" between them. In practice, it may not be so
easy to decide whether an "understanding" that isn't in
writing and doesn’t involve secret meetings makes for a cartel.
- Business
Day website
Xstrata
/ Anglo American
Xstrata's
Anglo plan is a test for Zuma : Alexander Smith - 22
June
Xstrata not only needs to persuade Anglo American's board and
shareholders that a merger of the two miners makes sense, it must
also convince new South African President Jacob Zuma of the deal's
merits. That could prove a tough sell. South Africa's Public
Investment Corporation (PIC) - the public sector investor which
owns just 5.5 percent of Anglo - could vote against any proposal.
But with no golden share or other means to frustrate a deal, the
ruling ANC government stands little chance of blocking any
proposals this way. Its only other route - without resorting to
extraordinary measures such as revoking mining licences - is via
the competition process. An Xstrata/Anglo combination will be
closely watched as a test of whether South Africa's proudly
independent competition authorities can continue to operate at
arm's length under Zuma. - Reuters
website
Trade
SSFs on international companies - 22 June
Interview with Allan Thomson, head of derivatives and equities
trading, JSE, and Alec Hogg on the Moneyweb
website
Quirky
issues involved in structuring mining deal - 22 June
The British-Swiss mining company Xstrata has made a preliminary
approach to its rival Anglo American about a possible $70 billion
combination. But the structuring issues for such a megadeal raise
some quirky points about American takeover and securities law and
its governance of overseas takeovers with contacts in or into the
United States. Although Xstrata is based in Switzerland, it is
organized under the laws of England and Wales. Anglo American
reincorporated in 1999 from South Africa into a company also
organized under the laws of England and Wales. At the time, Anglo
American remained listed on the Johannesburg Stock Exchange as
well as the Nasdaq stock market . . . The parties are likely to
structure such a deal as a scheme of arrangement and not a tender
offer. A scheme of arrangement is a reorganization of a company's
capital structure or its debts that is binding on creditors and
shareholders. It is not a structure available or utilized in the
United States, but instead is prevalent in countries modeled upon
the English company law system (England, Australia, New Zealand,
South Africa, etc), as currently embodied in Section 425 of the English
Companies Act 1985. - New
York Times website
Keyphrases :
United States. Exchange Act
United States. Williams Act
De-spinning
the Anglo American/Xstrata myths - 23 June
Whatever the outcome of Xtrata's "merger of equals"
with Anglo American, a proposal that's at "a very preliminary
stage", says Anglo American, investors can rest assured that
investment bankers and their sidekicks, not least tardy lawyers,
are going to pocket hundreds of millions of dollars from the
festival. A good deal of the effort is going to go into spinning
stories aimed at winning over influential investors. Given that
Xstrata is ranked the potential predator, here are the some of the
salient facts. - Moneyweb
website
Government
opposes Anglo, Xstrata merger - 23 June
South Africa's mining minister said on Tuesday the government was
opposed to a possible merger between Xstrata and rival Anglo
American Plc, terming such a potential move as
"unacceptable". "That is unhealthy. That is
uncompetitive and in terms of the global standards and principles
it is just unacceptable," Mining Minister Susan Shabangu told
reporters. "Definitely monopolies cannot be promoted in South
Africa". - Moneyweb
website
Anglo
rejects Xstrata merger - 23 June
Anglo American, the global mining group, last night flatly
rejected Xstrata's proposed all-share "merger of
equals", putting itself at odds with several big investors as
it labelled the offer from its Anglo-Swiss rival "totally
unacceptable". - Financial
Times website
Anglo
American response to merger proposal - 23 June
In view of Xstrata's formal request that Anglo American should now
consider a merger, the Board has updated its views on the merits
of a potential combination. The Board has concluded that a
combination with Xstrata would profoundly impact the nature of the
Group's portfolio by significantly diluting Anglo American's
unique exposure to the structurally attractive platinum, iron ore
and diamond markets while increasing exposure to nickel and zinc.
- Moneyweb
website
Xstrata
says no retrenchments, South Africa net Anglo-deal beneficiary
- 24 June
Anglo American suitor Xstrata on Wednesday published an open
letter in which it set out its rationale for an all-share merger
of equals that bore none of the usual characteristics of
shareholder premiums and worker retrenchments. Mining analyst John
Meyer of Fairfax said simultaneously that the merger offered an
acceleration of efficiency gains for Anglo and Standard Life
Investments head David Cumming urged Anglo to hold talks on the
plan rather than reject it out of hand. - Creamer
Media's Mining Weekly website
Xstrata's
confidential letter to the board of Anglo American plc
- 24 June
Interview with Barry Sergeant : Moneyweb and Alec Hogg on the Moneyweb
website
Government
retains mining merger concerns - 26 June
South Africa's key concerns over Xstrata Plc's (XTA.L) merger
proposal to Anglo American Plc are the impact on jobs and
competition, its mining ministry said after talks with executives
from the two groups. Restating the South African government's view
on the proposed deal, ministry spokesman Jeremy Michaels said on
Friday the list of concerns was topped by how jobs would be
affected, antitrust issues and other implications for the wider
South African economy. But he said the ministry needed more
details to form a final view on the possible deal. - Moneyweb
website
Competition Tribunal
South
Africa regulator backs JSE's Bond Exchange bid - 3
June
JSE Ltd, operator of South Africa's sole stock exchange, said
the competition regulator had no objection to the company's bid
for the nation's bond exchange. South Africa's Competition
Tribunal said in a statement today it granted unconditional
approval for the JSE's 240.5 million rand ($30 million) offer
for the Bond Exchange of South Africa Ltd. The tribunal's
decision, together with the consent obtained from the central
bank, the Securities Regulation Panel and the Financial Services
Board, means all regulatory approvals have been obtained, the JSE
said. The High Court of South Africa’'s agreement is the only
remaining hurdle, it said. - Bloomberg
website
Cartel
action 'will be a crime' - 5 June
Cartel activity will inevitably become a criminal offence in South
Africa to prevent the collusion of companies to manipulate prices,
according to competition tribunal chairman David Lewis.
"We've always agreed that imprisonment fits the
offence," he told Business Report on the sidelines of
the International Competition Network (ICN) conference in Zurich
yesterday. Lewis was commenting on the increased use of criminal
sanctions on cartel activity by competition authorities around the
globe. - Business
Report website
A
specific price level is needed to determine excessiveness, court
asserts - 12 June
It was only natural that lawyers, not only those acting for steel
producer ArcelorMittal South Africa, would cast an extremely
critical eye over the Competition Tribunal's first-ever
excessive-pricing ruling of 2007, involving flat steel. It was a
landmark case and the approach taken by the tribunal would set the
tone for further such cases. - Creamer
Media's Engineering News website
Fur
flies at Competition Tribunal - 18 June
In a desperate bid to clear its name and avoid a whopping
R1,2-billion fine, Pioneer Foods pulled out all the stops on the
second day of its Competition Tribunal hearing. The Competition
Commission alleges that the company was part of a bread cartel
involved in price-fixing. Pioneer's advocate John Newdigate jumped
all over new evidence introduced by some of the Competition
Commission’s witnesses. - Mail
& Guardian website
Competition
Commission raids cement producers - 25 June
On 24 June 2009 the Competition Commission conducted a search and
seizure operation at the premises of the major cement
manufacturers. This relates to a broad investigation into the
cement industry. Whilst reserving its rights, PPC is co-operating
with the Commission. - Moneyweb
website
Price-fixing
as a solution to xenophobia - 24 June
Collusion appears to be the South African way of doing business.
If it's not bakeries, it's milk producers ; if it's not steel
manufactures, it's construction companies. Now it has been
touted as a solution to xenophobic violence in Guguletu. This
week, Somali and South African shop owners in Guguletu held a
series of meetings to solve disputes that had the potential to
spill over into xenophobic violence, like last year's attacks on
foreign traders in the townships. At these meetings, the traders
agreed to effectively fix prices on basic goods like bread, milk
and paraffin. However, this is not even a negotiated price -
the Somalis are being forced to raise their prices to match those
of their South African counterparts. It was a choice between
agreeing to fix prices or being run out of town. - Mail
& Guardian website
See also :
Australia
targets cartel conduct with new criminal and civil offenses