Anglo hits at EU ruling to cut stake in Lonrho

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The Independent Online
Anglo American Corporation, the South African mining giant, said yesterday it was ready to pursue several options after receiving confirmation that the European Commission was forcing it to cut its stake in Lonrho from 27.5 per cent to less than 10 per cent.

The decision, the first time the European body has ordered the disposal of shares as a condition of clearing a deal between main groupings, was made as a result of fears that the stake would allow Anglo to dominate the platinum market.

It follows the blocking a year ago of a merger deal between Lonrho's platinum business and that of Gencor, another South African mining group, by European competition commissioner Karel Van Miert.

The Commission said yesterday the latest link-up would have resulted in Anglo and Lonrho controlling the world's platinum output.

"The companies' market shares, their low-cost reserves and the fact that the Russian producer's market position is expected to decrease in the future would lead to a combined Anglo-Lonrho having an estimated world market share for platinum production in excess of 60 per cent in a few years' time," it said.

Anglo said it was "very disappointed" at the decision. "However, we have two years in which to divest this stake, a good relationship with Lonrho and a number of options to consider, so we are confident of a satisfactory outcome," Julian Ogilvie Thompson, the Anglo chairman, said yesterday.

The bulk of the Anglo holding in Lonrho was acquired in November after the South African group picked up an 18.4 per cent stake from Dieter Bock, the mining to motor distribution conglomerate's former chairman. One observer suggested that other South African groups, such as the black-controlled JCI or Gold Fields of South Africa, might be interested in the stake to be sold under the EC ruling.