ArcelorMittal South Africa Ltd (JSE:ACL) signed a sale of business agreement to acquire assets and liabilities of the structural steel and rail manufacturing business from Highveld Structural Mill Proprietary Limited for ZAR 300 million on August 1, 2019. Under the terms, ArcelorMittal South Africa will pay ZAR 150 million in cash on completion and the completion price will be increased by an amount equal to ZAR 150 million, subject to the occurrence of a payment trigger event, being either of the following occurring after the closing date but prior to December 31, 2023 (or December 31, 2024 if the effective date occurs after 31 May 2020), unless otherwise agreed between the parties: i. ArcelorMittal South Africa (or any member of the ArcelorMittal South Africa group) becoming entitled to draw down or utilise a funding facility from the Industrial Development Corporation of South Africa Limited ("IDC") or similar financial institution in an amount up to ZAR 150 million together with the ArcelorMittal South Africa board approval of a business case providing for the investment in improvements, modifications and/or upgrades to the structural steel mill so as to enable it to manufacture alternative products, in particular, mainline rail; or ii. the free cash flow of the business during any financial year equating to exceeding ZAR 100 million. The adjustment amount will be payable by ArcelorMittal South Africa to HSM within a period of 5 business days from the occurrence of a payment trigger event. The funds for the purchase of the business is envisaged to be funded by ArcelorMittal South Africa via new borrowings. The effective date purchase price will be funded from internal sources and the conditional adjustment amount will be funded from new borrowings. ArcelorMittal South Africa will, prior to the effective date, make offers of employment on a fixed basis to all current employees of the business to keep them employed. The proposed transaction is subject to obtaining the necessary regulatory approvals required for implementation of the proposed transaction, being the approval of the competition authorities of South Africa, ArcelorMittal South Africa obtaining an air emissions licence from the relevant governmental authority for the purposes of operating the business from the effective date, the release of the security held by the IDC over the assets comprising the business and various supply and lease agreements having been entered into in order to keep the business operational. As of February 12, 2020, the Commission’s investigation found that there would be no anti-competitive effects arising from the merger. It recommended that the merger should be approved and that it would potentially benefit the public interest. The competition tribunal of south Africa approved the deal without conditions. The effective date of the proposed transaction will be no later than December 1, 2020, unless the parties agree otherwise.