| Tue 9 Sep 2008, 12:12 | | AEG - AVENG Limited - Update on competition commission matters |
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AEG
AEG
AEG - AVENG Limited - Update on competition commission matters
AVENG LIMITED
Registration number 1944/018119/06
Share code: AEG
ISIN code: ZAE000111829
UPDATE ON COMPETITION COMMISSION MATTERS
The Aveng Group ("Aveng"), in its results announcement yesterday, referred to
the Competition Commission ("the Commission") having turned its attention to
addressing issues of anti-competitive behaviour in the broader construction
industry. Aveng also advised shareholders that the Commission had identified
issues in the building materials operations of the Group.
In order to provide shareholders with as complete disclosure as possible, the
Group is detailing all of its current involvement with the Competition
Commission.
Aveng Manufacturing, a division of Aveng (Africa) Limited
1 Late yesterday, the Competition Commission made public its findings
relating to applications by Aveng Manufacturing to acquire four target
firms in the production and supply of reinforcing steel products. The
Commission has recommended against a merger by Steeledale, a division of
Aveng (Africa) Limited and has prohibited three other associated mergers.
One of the reasons cited by the Commission in its press release for its
decision is that it is concerned that the mergers will make future
coordination in the relevant markets easier to achieve and/or sustain,
given the fact that the Commission identified in its investigation certain
instances of collusive activity in the relevant markets, which occurred
some two to three years ago.
In its findings for prohibiting the merger, the Commission reflected that
parties met, exchanged information and agreed amongst themselves to refrain
from price wars and to return the market to stability, but has not stated
evidence of actual price fixing in respect of reinforcing steel products.
Aveng became aware of the conduct identified by the Commission during its
normal review of the application for the merger.
2. The Commission is investigating conduct in relation to concrete products
manufactured by the Infraset business unit and has identified certain
conduct in relation to steel mesh products which comprise a small operation
within the Steeledale business unit.
Trident Steel (Pty) Limited
We are aware of a broader ongoing investigation into the steel industry and that
Trident Steel was cited in the Commission`s complaint initiation statement in
relation to this investigation. To date the Commission has not contacted Trident
Steel in respect of this matter.
Internal compliance review
In anticipation of the Commission`s intention to investigate the broader
building materials` industry, the Group commissioned an internal compliance
review and educational programme using external legal advisors, which are
ongoing. The Aveng Group is committed to co-operating fully with the Commission.
Conclusion
Aveng CEO Roger Jardine emphasised that the Board does not condone any breaches
of the Group`s Code of Business Conduct and stated that the Board will take all
necessary steps to ensure that good corporate governance is maintained
throughout its operations.
For and on behalf of the Board
W.R. JARDINE
Chief Executive Officer
9 September 2008
Sponsor:
J.P. Morgan Equities
Date: 09/09/2008 12:12:02 Produced by the JSE SENS Department.
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