South Africa’s Sibanye-Stillwater makes £285m offer to acquire Lonmin

South African precious metals mining firm Sibanye-Stillwater has made an offer to acquire UK-based platinum group metals (PGMs) producer Lonmin in a £285m deal.

Under the offer, Lonmin shareholders will receive 0.967 new Sibanye-Stillwater shares for each Lonmin unit.

Once the acquisition is closed, Lonmin shareholders will hold 11.3% of the enlarged Sibanye-Stillwater Group, with Sibanye-Stillwater shareholders owning the remaining 88.7%.

The proposed acquisition is in line with Sibanye-Stillwater’s South African PGM strategy and follows the acquisitions of Aquarius Platinum and the Rustenburg Operations from Anglo American Platinum.

Lonmin CEO Ben Magara said: “The combination with Sibanye-Stillwater provides a stronger platform for Lonmin shareholders and other stakeholders to benefit from the long-term upside potential of an enlarged Sibanye-Stillwater Group with greater geographical and commodity diversification.”

“The flexibility inherent in the larger regional PGM footprint will create a more robust business, better able to withstand volatile PGM prices and exchange rates.”

Magara noted that the company continues to be affected by its capital structure and liquidity concerns.

The combination is expected to enable Sibanye-Stillwater to unlock operational synergies and become a fully integrated PGM producer.

Sibanye-Stillwater CEO Neal Froneman said: “The proposed combination with Lonmin positions the enlarged Sibanye-Stillwater Group as a leading mine-to-market producer of PGMs in South Africa.

“The flexibility inherent in the larger regional PGM footprint will create a more robust business, better able to withstand volatile PGM prices and exchange rates.”

For the six months ending 31 March this year, Lonmin registered a net loss of $214m.

The Lonmin board has recommended the offer to its shareholders.