South Africa Antitrust Body Allows Gupta-Zuma's Optimum Purchaseby
South Africa’s Competition Tribunal approved the takeover of Glencore Plc’s Optimum coal unit by a company owned by the Gupta family and a venture fund in which President Jacob Zuma’s son is the biggest investor.
Tegeta Exploration & Resources (Pty) Ltd. agreed to buy Optimum for 2.15 billion rand ($142 million) in December after Glencore had placed the mine under business administration because it said it couldn’t make a profit due to the terms of a coal supply due with state power company Eskom Holdings SOC Ltd. Tegeta is 64 percent owned by Mabengela Investments, which in turn is 45 percent held by Duduzane Zuma, according to people familiar with the matter. The Gupta family’s stake in the venture is held through Oakbay Investments (Pty) Ltd.
The deal may proceed on condition that Tegeta “will not retrench any employees of the target firms as a result of the merger,” Oakbay said in an e-mailed statement on Tuesday. Optimum employs more than 3,000, it said.
Tegeta will supply no more than 5 percent of Eskom’s coal needs, Oakbay said.
Peter Grauer, chairman of Bloomberg LP, the parent of Bloomberg News, is a senior independent non-executive director at Glencore.