Steelmaker ArcelorMittal is optimistic about the merger of ArcelorMittal Brazil and Votorantim Siderurgia, a company executive said.
In September this year, a division of Brazil’s anti-trust authority, Cade, recommended the authority to reject the deal, following requests from steelmaker Companhia Siderurgica Nacional (CSN) and the country’s association of iron and steel scrap companies, Inesfa.
Cade’s general superintendent said at the time the deal would make the combined businesses a leader in terms of market share in the local longs market, hampering competition.
Jefferson de Paula, longs president of South America for ArcelorMittal, told media the company has offered a solution to the potential market concentration issue. He said these topics are being discussed with Cade.
De Paula declined to provide specifics about the conversations and the proposed solutions by ArcelorMittal on the potential market concentration, but said Cade won’t take too long to analyze the steelmaker’s points.
De Paula argued Brazil’s longs market still lacks infrastructure projects, which could boost longs demand further.
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.