The European Commission has approved under the EU Merger Regulation the acquisition of Italy’s Ilva, the largest producer of flat carbon steel in Europe and worldwide, by ArcelorMittal, world‘s leading integrated steel and mining company, a press release informs
The decision is conditional on the divestiture of an extensive remedy package to preserve effective competition on European steel markets to the benefit of consumers and businesses.
”EC merger clearance follows the conclusion of the Commission’s Phase II investigation into the proposed acquisition of Ilva, and has been granted on the basis that the Company has committed to dispose of assets in Italy, Romania (ArcelorMittal Galati), Macedonia, Czech Republic, Luxembourg and Belgium, as previously announced on 13 April 2018,” ArcelorMittal announced in a press release as well.
Approval by the EC is a significant milestone in the transaction to acquire Ilva and represents a major step towards closing the deal, which is now expected to occur as soon as possible.
Both companies are significant producers in Europe of hot rolled, cold rolled and galvanised flat carbon steel. ArcelorMittal has a wide production network across the European Economic Area (EEA) and Ilva has major production assets in Italy.
Commissioner Margrethe Vestager, in charge of competition policy, said: “Steel is a critical input for many European industries and products we use every day. Today’s decision makes sure that ArcelorMittal’s acquisition of Ilva, creating the by far largest steelmaker in Europe, does not result in higher steel prices – at the expense of European industries, the millions of people they employ and consumers. ArcelorMittal has proposed to sell a number of steel plants throughout Europe to one or more buyers, who will run them to compete with ArcelorMittal on a lasting basis. This will preserve effective competition on European steel markets. It goes hand in hand with decisive EU action to protect our steel industry from unfair trade distortions from third countries.”
As part of its in-depth investigation, the Commission reviewed more than 800,000 internal documents and took into account feedback from over 200 customers. These customers, including many small and medium sized companies, are active in a wide range of sectors, such as construction, car manufacturing, household appliances, tubes etc. They rely on competitive steel prices to compete with imported products in the EEA as well as on global markets.
As a result of its investigation, the Commission had concerns that the transaction as notified would have resulted in higher prices for European customers for hot rolled, cold rolled and galvanised flat carbon steel.