The European Commission (EC), the executive body of the EU, has cleared under EU merger regulations Luxembourg-based ArcelorMittal's proposed acquisition of Dutch tailor welded blanks (TBW) producer, Noble European Holdings B.V. (Noble European), a subsidiary of North America's largest TBW producer, Noble International Ltd (Noble).
Through the proposed takeover, ArcelorMittal will now regain control over the tailor welded blanks business in Europe, which it had sold to Noble in 2007.
As SteelOrbis previously reported, ArcelorMittal agreed with Noble to combine their TBW businesses in September 2007.
Under the terms of the agreement, Noble European acquired ArcelorMittal's Tailored Blank Arcelor (TBA) operations at a total cost of $300 million, with ArcelorMittal obtaining approximately 40 percent of Noble's issued and outstanding common shares.
According to the results of the EC's investigation, the parties' activities in the TBA business do not overlap in the European Economic Area and would lead only to a small overlap worldwide. Therefore, the EC concluded that the transaction would not significantly impede effective competition in the EU.
The EC also added that the acquisition will lead to a vertical link, since ArcelorMittal produces the sheets used in TBW production. However, as Noble European already receives almost all its sheet supplies from ArcelorMittal, the EC said, "The takeover will not lead to any significant change in the structure of the market. The merged entity will continue to face several competitors in the market for flat carbon steel products."
Noble's US parent company filed for Chapter 11 bankruptcy protection earlier this year.
Tailor welded blanks (TWBs) are largely used in vehicle manufacture and are produced by cutting to size and welding together various individual pieces of uncoated and/or coated sheet, enabling complex shapes embodying steel of different grades and thickness to be produced. TWBs allow automobile parts to be produced with a minimum quantity of steel, thereby reducing overall vehicle weight while increasing vehicles' impact safety performance.