## Facts

- Gold Fields, a British gold producer, wholly owned GFMC, a Delaware corporation operating U.S. gold mines.
- Gold Fields owned a large minority stake in Newmont, which controlled Newmont Gold, both significant U.S.-connected gold producers.
- Minorco, a Luxembourg corporation controlled by Anglo and De Beers, launched a hostile tender offer in the United Kingdom to acquire all shares of Gold Fields.
- Plaintiffs alleged the acquisition would concentrate control of gold production and lessen competition in the world gold market, harming Newmont and Newmont Gold as competitors.
- Plaintiffs also alleged Minorco’s offering materials contained material misstatements and omissions affecting U.S. investors, including U.S. holders of Gold Fields ADRs.
- The district court preliminarily enjoined the tender offer on antitrust grounds, denied antitrust standing to Gold Fields and GFMC, and dismissed the securities claims for lack of a sufficient U.S. jurisdictional basis.
- Minorco appealed the injunction; Gold Fields and GFMC cross-appealed the standing ruling and the securities dismissal.

## Issues

1. Whether Newmont and Newmont Gold alleged a sufficient threat of antitrust injury to seek injunctive relief under § 16 of the Clayton Act for an alleged § 7 violation.
2. Whether Gold Fields and GFMC, as the target and its wholly owned subsidiary, had antitrust standing under § 16.
3. Whether plaintiffs showed a likelihood of success that the acquisition would substantially lessen competition in a relevant gold market under § 7.
4. Whether U.S. antifraud provisions (including § 10(b) and Rule 10b-5) could be applied to a largely foreign tender offer based on domestic conduct and/or effects on U.S. investors and markets.
5. Whether Minorco’s offer disclosures were materially misleading such that injunctive relief was warranted under U.S. securities law.

## Decision

- The Second Circuit affirmed the preliminary injunction, holding Newmont and Newmont Gold had shown a threat of antitrust injury and a likelihood of success on the § 7 claim.
- The court affirmed denial of antitrust standing to Gold Fields and GFMC, concluding their asserted injuries as target and subsidiary were not antitrust injury.
- The court reversed the dismissal of the securities claims, holding there was subject-matter jurisdiction based on sufficient U.S. conduct and effects.
- The court held that alleged disclosure deficiencies could be material to U.S. shareholders and could support injunctive relief under U.S. antifraud standards.
- The case was remanded for further proceedings consistent with these rulings.

## Legal Principles

- Clayton Act § 16 authorizes injunctive relief upon a showing of threatened loss or damage, but the plaintiff must still demonstrate a threat of “antitrust injury” (injury of the type the antitrust laws were intended to prevent and flowing from what makes the conduct unlawful).
- Competitors threatened by increased concentration and market power from a merger or acquisition may have § 16 standing because the threatened competitive harm aligns with antitrust injury.
- A takeover target’s asserted injury from being acquired, including loss of control or shareholder-value effects, does not by itself constitute antitrust injury sufficient for § 16 standing.
- Clayton Act § 7 addresses probable future competitive effects; a preliminary injunction may issue where plaintiffs show a likelihood that an acquisition will substantially lessen competition in the relevant market.
- U.S. antifraud provisions may apply to predominantly foreign transactions when significant U.S. conduct furthers the alleged fraud and/or substantial, reasonably foreseeable effects occur in the United States or upon U.S. investors.
- Material omissions or misleading statements in tender-offer materials provided to U.S. investors can support injunctive relief to ensure full and fair disclosure.

## Conclusion

The Second Circuit sustained an injunction against a foreign tender offer because competitor-plaintiffs showed threatened antitrust injury and likely § 7 harm in the gold market, while the target and its subsidiary lacked antitrust standing. It also held that U.S. courts could hear antifraud claims and require adequate disclosure where the offer had meaningful U.S. investor effects and the materials were plausibly materially misleading.


Consol. Gold Fields PLC v. Minorco, S.A., 871 F.2d 252 (2d Cir. 1989)