Brazilian long steelmakers ArcelorMittal Brazil and Votorantim Siderurgia, which announced a merger last year, may need to sell assets in order to get the deal approved. A media report from Valor said a Cade counselor, Polyanna Vilanova, suggested the two steelmakers could sell assets with a major relevance. Cade is Brazil’s anti-trust authority.
SteelOrbis obtained access to the Cade report, which says the deal would have an adverse impact on several longs products in three different capacity use scenarios: 40, 50 and 70 percent.
“In the scenario of a 70 percent [use of capacity], the most optimistic for the [two steelmakers,] the segment of light sections has the potential of generating competitive concerns. In all the other scenarios and markets there’s a plausible increase in the market power,” the Cade report said.
The Cade report did not specifically suggest the asset sale. Parts of the public report remain hidden due to the sensibility of the matter.
The Valor news report said the two steelmakers could sell assets to competitors that already operate in specific markets. Valor did not name the markets, but SteelOrbis learned they are basically related to the longs segment.