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ARC Opposes South African Conglomerate’s Attempt : Newport Firm Asks U.S. to Halt Bid for Parent

From Staff and Wire Reports

ARC America Corp., a Newport Beach manufacturer of concrete pipe, is seeking help from the federal government to fight off a hostile attempt by a South African conglomerate to take over ARC’s parent company, Consolidated Gold Fields PLC in London.

Executives at ARC fear that the firm could lose much of its local, state and federal business if its British parent succumbs to the $4.9-billion package put out by Minorco, a mining concern run by South Africa’s Oppenheimer-DeBeers syndicate, the world’s largest gold producer.

Many of the government entities that hire ARC have laws preventing them from doing business with South African companies or their subsidiaries.

Los Angeles, California and the U.S. government, for instance, have laws barring the use of South African subsidiaries on government projects. The laws are a protest against South Africa’s system of apartheid.

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In a bid to block the takeover, ARC America has filed an antitrust complaint with the Federal Trade Commission and asked President Reagan to intercede. A successful takeover by Minorco, ARC said, would represent the single largest South African buyout of a U.S. company.

If the takeover is successful, ARC would become at least the second Orange County firm this year to be bought by a South African conglomerate.

In March, a British subsidiary of Barlow Rand Ltd. in South Africa acquired 90% of Melles Griot, an Irvine laser and optics manufacturer. The deal cost the Irvine firm its primary banker, Union Bank in Los Angeles, whose own internal policies coincided with city and state laws opposing apartheid.

ARC America has 3,000 employees in 24 states making concrete sewer pipes, flood control pipes and industrial water pipes. In California, it has plants in Corona and Fresno, a company spokeswoman said.

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Consolidated controls 41% of the West’s production of the mineral zircon, which is a key material for manufacturing U.S. submarines.

“The company considers that a national security threat,” Dale Leibach, an ARC America spokesman, said of possible transfer of ownership to a South African company.

Founded in 1892 to acquire a South African gold mining concern, Consolidated Gold Fields has evolved into a conglomerate with interests in finance, construction materials and mining exploration. In fiscal year ended June 30, 1987, it reported net income of about $289 million on sales of $1.9 billion.

In 1977, it acquired ARC, which is now one of its four wholly owned subsidiaries. In the 1987 fiscal year, ARC had sales of $44 million. No operating or net income figure was available.


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