Anglo American to increase stake in Kumba
Anglo American PLC's further stake acquisition from South African
iron ore producer Kumba Resources Ltd has been approved by European Union Commission.
Anglo American has offered around ZAR 7.1 billion ($1.1 billion) for Kumba's share. Anglo American currently owns 35% stake in Kumba.
According to South African securities regulations, a company can make an offer to other shareholders when it owns 35% stake. However, Anglo American has made a deal with South African government to limit its stake at 49% due to South African's being keen to preserve rights.
Kumba's independent directors have not accepted the offer that was submitted by Anglo American last week because of its unfair value.
However,
Europe has approved the bid of Anglo American and explained that there is sufficient competition for market shares.
Anglo American wants to increase its stake in Kumba as a result of record income from
iron ore exports obtained by rival
Rio Tinto Ltd and
BHP Billiton.
Kumba has the world's biggest reserve of
iron ore at 800 million mts. The company produced 28.5 million tons of
iron ore in a year which ended on June 30, 2003.