Brazilian anti-trust authority Cade has approved, with certain restrictions, a merger between ArcelorMittal Brazil and Votorantim Siderurgia, the companies said on Wednesday.
Under the terms of the merger agreement, the steelmakers agreed to sell certain assets to avoid a concentration in the domestic longs market. The deal is yet to be concluded and is limited to the completion of certain commitments by the two steel producers, Cade said.
The deal only involves the longs operations of both companies in Brazil, Votorantim Siderurgia said. Votorantim’s mills in Argentina and Colombia, Acerbrag and Acerias Paz del Rio, were not included.
ArcelorMittal has agreed to sell its Cariacica long steel mill in the state of Espirito Santo, while transferring a lease contract at its Itauna plant in the state of Minas Gerais to another company. It also committed to selling two steel wire drawing facilities.
ArcelorMittal Brazil said on Wednesday the deal will bring significant operational, industrial and logistic opportunities for the company that will improve its competitive position. Brazilian longs producer Cipalam said in a document filing it was interested in acquiring certain assets from ArcelorMittal Brazil.
Under the terms of the merger, Votorantim Siderurgia will be a subsidiary of ArcelorMittal Brazil. Votorantim SA, the holding company that owns Votorantim Siderurgia, will own a minority stake at ArcelorMittal Brazil.
Votorantim’s mills in Colombia and Argentina will still be part of the Votorantim holding portfolio.