EU antitrust regulators clear Mittal's bid
The approval was on the condition that the new combined steel giant sell off some of its facilities if the bid succeeds.india Updated: Jun 02, 2006 21:02 IST
European Union antitrust regulators on Friday approved Mittal Steel Co's takeover bid for rival Arcelor SA, on condition the new combined steel giant sell off some of its facilities if the bid succeeds.
The European Commission said its investigation into Mittal's $33 billion bid for Arcelor showed it "would not significantly impede effective competition" in the 25-nation bloc.
It did say that Mittal would have to sell off some of its production lines making heavy section beams, which Mittal has agreed to do. If its bid succeeds, it plans to sell two Arcelor heavy and medium section steel mills in Germany and Italy and a Mittal mill in Poland.
The commission said the three plants account for around 10 per cent of the total production capacity for heavy section products in the EU, and including Norway, Switzerland and Iceland.
It feared the combined company would become the dominant maker in the production of heavy section beams, leaving limited alternatives for customers.
"The other competitors active on the market would be much smaller in terms of production capacity, geographic coverage and product range," the commission said.
EU Competition Commissioner Neelie Kroes said she was "completely satisfied that, through the substantial remedies offered by Mittal, these requirements would be met."
The commission said its investigation showed the two companies' businesses "are largely complementary," saying Arcelor was principally active in western Europe, North and South America, while Mittal was strongest in North America, central and eastern Europe, Africa.