FTC approves Hyundai’s takeover of Hanbo
South
Korea's anti-trust authority Fair Trade Commission (FTC) today gave conditional approval to Hyundai Motor Group's takeover bid of Hanbo Iron & Steel Co., with the requirement that it sells a part of its existing steel bar
production facilities.
However,
Korea's Fair Trade Commission gave an overall positive assessment of the takeover, claiming that it would be effective in balancing POSCO's uncontested position in the hot-rolled sector.
According to the condition imposed by the FTC, Hyundai's steel producing arm INI Steel Co. must sell its 300'000 ton-per-year steel rolling mill within one year.
Market sources report that the decision was made in order to prevent any potential monopolistic practices in the steel bar market and to enhance competition in South
Korea's overall steel industry.
As SteelOrbis previously reported, on July 31st of this year INI Steel and Hyundai Hysco signed a deal worth Won 910 billion ($794 million) for the takeover of the bankrupt Korean steel producer.
According to the FTC, the acquisition will increase INI Steel's share in the local steel-bar market to almost 40%, from the current 28%.
When the sale is complete, which sources say will take place next Tuesday, INI Steel will take over Hanbo's hot-rolling facilities, allowing it to produce 3.9 million tons of hot-rolled steel annually; and Hyundai Hysco, taking over Hanbo's cold-rolled steel facilities, will be able to increase its annual
production capacity from 1.8 million tons to 3.8 million tons.