June 12, 2003
By Reuters
Durban - A merger between gold producers Harmony Gold and African Rainbow Minerals (ARMgold) should be completed by mid-September, Harmony chief executive Bernard Swanepoel said yesterday.
The combined firm with annual output of 4.1 million ounces would pursue growth organically and through acquisitions, Swanepoel said.
He said the merger details were sent to competition authorities a week after the proposed deal was announced on May 2 - with a ruling expected within two months of the submission date.
Independent advisors for both companies were studying the deal to ensure it was fair and reasonable and they were expected to report their findings in the next 10 days, he added.
Harmony shareholders would vote on the deal in early August and ARMgold shareholders at the end of that month. The deal would be effective about three weeks later, he said.
Swanepoel did not expect any major hurdles.
"There is no dissent among shareholders that I'm aware of on either side."
Under the proposed deal ARMgold will pay a R5 special dividend, the premium on the share deal, before the merger takes effect
.
Harmony will issue 63.67 million new shares to ARMgold shareholders, giving a ratio of two Harmony shares for every three ordinary shares held in ARMgold.
Swanepoel said both companies were known for their aggressive growth strategies.
"We will continue to pursue that growth as both organic ... but it will also be acquisitional growth," he said.
The majority of Harmony's operations are based in South Africa but the mining producer has interests in Australia and investments in Russia.
ARMgold's focus had been on Africa. "The new Harmony will certainly be looking at Africa," Swanepoel said.
The new group expected to make savings of about R10 million a month from the merger but Swanepoel said there should be no need for job cuts.
"It's really two lean and mean companies coming together ... there's not really a surplus labour issue."
Harmony's share price closed 40c lower at R102.09 in late trade in Johannesburg yesterday, underperforming a gain in the gold sector. The gold index rose 0.79 percent to 2273.39.
ARMgold was down 30c at R72.61. - Reuters
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