Photo by: Creamer Media
The Competition Tribunal has conditionally approved the proposed large merger wherein Afrimat intends to acquire the entire issued share capital of Lafarge South Africa Holdings (Lafarge SA).
The tribunal’s decision follows a merger hearing held on April 5, during which it heard submissions from the Competition Commission and the merging parties.
This was preceded by the tribunal hearing three intervention applications by Lenvalco Readymix; Letsoela Investment Holding Trust and Nchakha Moloi NO; and Ba Barolong Boo Tau Rapulana Community and the Barolong Boo Tau Rapulana Traditional Council, collectively referred to as Ba Barolong Community, respectively.
Following the tribunal’s hearing of the intervention applications, which were opposed by the merging parties, the tribunal granted Lenvalco and Ba Barolong Community leave to participate in the merger proceedings. Letsoela and Nchakha’s intervention application was dismissed.
Lenvalco and Ba Barolong Community subsequently withdrew their participation and the merger proceeded unopposed.
The tribunal has approved the merger subject to conditions involving, among others, a structural remedy which involves the merging parties divesting of various general aggregates quarries and ready-mix operations to firms owned by historically disadvantaged persons.
Further, to address public interest concerns, the merger approval is subject to a three-year moratorium on merger-related retrenchments and other measures to protect employment.
Afrimat informed shareholders in an April 10 statement that the acquisition would close by no later than April 24, adding that it looked forward to the exciting opportunities and implementation that lay ahead.
"This exciting deal forms part of the Afrimat group's ongoing diversification strategy. It will increase Afrimat's offering in the construction materials space, by expanding the group's quarry and ready-mix operations nationally.
"Additionally, access to the fly ash operations provides a foothold into the cement extender market. The grinding plant will allow Afrimat to grind various materials as value-added products for our current and new customers, while the cement kilns allow the group to enter the cement value chain competitively.
"We believe our efficiency drives and breadth of marketing in the construction materials industry will ensure a contribution at an operating profit level, further diversifying the group's profitability and ensuring long-term sustainability," Afrimat CEO Andries van Heerden commented.
Afrimat CFO Pieter de Wit has been appointed as the full-time integration manager for this process.
"Together with experienced leadership and the integration team, [De Wit will] focus on ensuring this process is as transparent and uncomplicated as possible. We will ensure that we utilise the skills within both Afrimat and Lafarge SA during the integration process to optimise efficiencies, productivity and profitability.
"The time is perfect for Afrimat to return to its roots of quarrying and aggerates to support long-term diversified sustainability across the group," Van Heerden said.