Global steel giant ArcelorMittal has announced that it has been granted merger clearance by the European Commission (EC) for AM Investco Italy Srl’s (AM Investco) proposed acquisition of the Italian steelmaker Ilva S.p.A (Ilva).
According to ArcelorMittal’s statement, the EC merger clearance follows the conclusion of the commission’s Phase II investigation into the proposed acquisition of Ilva, and has been granted on the basis that ArcelorMittal has committed to dispose of assets in Italy, Romania, Macedonia, the Czech Republic, Luxembourg and Belgium, as previously announced on April 13.
The company said that approval by the EC is a significant milestone in the transaction to acquire Ilva and represents a major step towards closing the deal, which is now expected to occur as soon as possible.
EU Commissioner Margrethe Vestager, who is in charge of competition policy, commented, "Steel is a critical input for many European industries and products we use every day. Today's decision makes sure that ArcelorMittal's acquisition of Ilva, creating the by far largest steelmaker in Europe, does not result in higher steel prices - at the expense of European industries, the millions of people they employ and consumers. ArcelorMittal has proposed to sell a number of steel plants throughout Europe to one or more buyers, who will run them to compete with ArcelorMittal on a lasting basis. This will preserve effective competition in European steel markets. It goes hand in hand with decisive EU action to protect our steel industry from unfair trade distortions from third countries. Finally, the sale of Ilva's assets to ArcelorMittal should also help accelerate the urgent environmental clean-up works in the Taranto region. This essential de-pollution work should continue without delay to protect the health of Taranto's inhabitants."
The commission had had concerns that the transaction as initially notified would have resulted in higher prices for European customers for hot rolled, cold rolled and galvanised flat carbon steel. The merged entity would have controlled over 40 percent of the production capacity for hot rolled, cold rolled and galvanized flat carbon steel products in the European Economic Area, with a far larger market share than any of its competitors in Europe, such as Tata Steel, Thyssenkrupp and Voestalpine. The commission investigation showed that the merged entity's competitors in Europe would have neither the incentive nor the ability to replace the reduced competition as a result of the transaction.