Colombia's antitrust agency has blocked the Brazilian steelmaker Gerdau SA from participating in the auction for control of the country's second biggest, state-owned mill, Acerias Paz del Rio (Paz del Rio).
The head of
Colombia's antitrust agency, Mr. Jairo Rubio, has commented that the possible merger between these two companies would restrict competition. Considering the fact that Gerdau became
Colombia's largest steel producer by acquiring two steel mills in the country in 2005, namely Diaco SA and Siderurgica del Pacifico SA, the antitrust agency's worries may have solid grounds.
However, the Brazilian steel maker may still be allowed to participate in the auction if it accepts certain conditions in the event of placing the winning bid, such as selling off certain operations, Mr. Rubio added.
On the other hand, the country's antitrust agency has permitted Gerdau's main rival –Arcelor Mittal – to participate in the Paz del Rio's auction.
Colombia's government and Paz del Rio's 6,700 former and current employees are expected to put a 52 percent stake in the company up for sale in the auction, which is to take place later this month. The minimum price for this stake was set at about $192 million level.