Xstrata Plc - proposed acquisition of WMC Resources Limited

Summary

Xstrata Plc, through an Australian subsidiary, proposes to acquire WMC Resources Limited. Xstrata is an international commodities producer with operations in copper, coal, ferrochrome, vanadium, zinc, lead, gold and silver. WMC produces commodities such as copper, nickel, uranium and phosphate fertiliser.

Market definition

The ACCC considered that the relevant markets were the national markets for the supply of refined copper, gold and silver.

Competition analysis

The ACCC formed the view that in the worldwide markets for the supply of refined copper, gold and silver the proposed acquisition would lead to only a small increase in Xstrata's market share. In respect of the national markets for gold and silver (the relevant market definition in the ACCC's view) the proposed acquisition would likewise lead only to a small increase in Xstrata's market share. In respect of refined copper, the ACCC formed the view that, while the acquisition would lead to a significant increase in Xstrata's market share in Australia, Xstrata would continue to be constrained by imports and a large number of multinational copper refining and production companies. The ACCC also looked at the proposed acquisition in light of Xstrata's relationship with Glencore and remained of the view that the proposed acquisition would not substantially lessen competition in the relevant markets. The ACCC did not oppose the proposed acquisition.

Initiation

Parties