The general superintendent of Brazil’s anti-trust authority, Cade, recommended on Wednesday the rejection of a proposed merger between the longs operations of ArcelorMittal Brazil and Votorantim Siderurgia in Brazil, following requests from steelmaker Companhia Siderurgica Nacional (CSN) and the country’s association of iron and steel scrap companies, Inesfa.
The superintendent said the deal would make the combined businesses a leader in terms of market share in the local longs market, hampering competition.
Brazilian steelmakers ArcelorMittal Brazil and Votorantim Siderurgia announced in February they would combine their long steel operations in the country. Under the terms of the deal, Votorantim Siderurgia’s assets in Brazil would be part of ArcelorMittal Brazil’s portfolio.
Votorantim’s mills in Argentina (Acerbrag) and Colombia (Acerias Paz del Rio) were not included in the deal.
The combined portfolio of the two companies would include ArcelorMittal’s mills in the cities of Monlevade, Cariacica, Juiz de Fora, Piracicaba and Itauna, as well as Votorantim Siderurgia’s mills in Barra Mansa and Resende, in addition to its participation in Sitrel, which is located in the city of Tres Lagoas.
As a result, the merger would create a “long product steel producer with annual crude steel capacity of 5.6 million mt and annual rolling capacity of 5.4 million mt,” ArcelorMittal Brazil said at the time.
ArcelorMittal Brazil said on Wednesday that the superintendent’s recommendation was “merely a technical concept whose analysis is an opinion,” adding that Cade itself is “the only authority that should take a final decision on the deal.”
ArcelorMittal Brazil said that along with Votorantim Siderurgia, it will to commence a dialogue with counselors at Cade as well as the entity’s president in order to present their view of the deal.
ArcelorMittal Brazil said it will cooperate with Cade to identify and solve eventual competition concerns.