A $6.1 billion hostile bid for Consolidated Gold Fields PLC has been dropped by Minorco SA following the British government’s decision to investigate the deal’s effect on the strategic metals markets.
British Trade Secretary Lord Young referred the takeover proposal to the Monopolies and Mergers Commission, which stalls the deal for at least three months.
Minorco, which is controlled by South African companies De Beers Consolidated Mines and Anglo American Corp, holds a 29.6% interest in Gold Fields. Some observes feel that Minorco will wait for the outcome of the British investigation, and if favorable, will move forward with a new bid for the company.
Concern over the deal arose after Gold Fields argued that Minorco would be acquiring a significant interest in the titanium and zircon markets if the deal closed. Both metals are considered strategic.
Financially however, gold plays the largest role in Gold Fields portfolio. If successful, the merger would have concentrated almost a third of the world’s gold output in the hands of South Africa’s Oppenheimer family, which holds major interests in De Beers and Anglo American.
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