Sibanye-Stillwater and Lonmin have merged to form the world’s second-largest platinum producer, as their shareholders approved the South African firm’s 226 million pound ($286 million) takeover of Lonmin.
After the majority of shareholders in both firms backed the revised all-share offer, which valued Lonmin at 60 million pounds less than originally proposed, Lonmin’s shares rose 7.7 percent while Sibanye’s were up 8.4 percent.
Sibanye, which also has gold mines in South Africa, has been growing its platinum presence by buying Anglo American Platinum’s Rustenburg operations in 2015, Aquarius Platinum and then U.S. palladium producer Stillwater.
The company first proposed buying Lonmin in 2017, a deal touted as the only way to save the cash-strapped company’s 29,000 strong workforce in South Africa where job cuts are politically sensitive as unemployment runs at around 27 percent.
The deal is seen as a life-line for cash-strapped Lonmin, which was hit hard by the drop in platinum prices and had to cut spending in order to retain a positive balance sheet, a condition of Sibanye’s proposed offer.
The Chief Executive Officer of Lonmin, Ben Magara said “we are very appreciative that shareholders realise the structural challenges that face Lonmin can actually be resolved with the merger to create a more diversified and stronger platform for Lonmin”.
A statement released by Renaissance Capital also said “we believe the acquisition of Lonmin by Sibanye represents the most robust solution to the challenges facing Lonmin”. The deal is expected to close on June 7, 2019.