ArcelorMittal Announces EC Clearance in Ilva Acquisition

SEATTLE (Scrap Monster): The European Commission (EC) has granted approval for ArcelorMittal’s proposed acquisition of Italy’s Ilva S.p.A. The approval is subject to conditions, but is considered as a major milestone in the transaction. The EC clearance will help ArcelorMittal to close the deal as soon as possible.

The EC had opened an in-depth investigation to assess the proposed acquisition of Ilva by ArcelorMittal under the EU Merger Regulation. The approval follows this in-depth review which had taken into consideration several competition concerns. The clearance follows the steelmaker’s assurance last month to dispose of certain European assets in Italy, Romania, Macedonia, Czech Republic, Luxembourg and Belgium, in order to preserve effective competition on European steel markets.

Margrethe Vestager, Commissioner-Competition Policy, EC stated that the decision to grant approval goes hand in hand with the EU objective of protecting the region’s steel industry from unfair competitions. The merger of the two companies will create the by far largest steelmaker in Europe. However, ArcelorMittal has already agreed to sell steel plants across Europe to buyers who will run them to compete with ArcelorMittal. This will preserve effective competition among steelmakers and prevent higher steel prices, Vestager said. Furthermore, ArcelorMittal is required to urgently carry out environmental clean-up activities in the Taranto region, which houses the Ilva steel plant.

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Initially, the EC had raised several concerns regarding the deal. The key concern was that the proposed merger transaction would result in higher prices for hot rolled, cold rolled and galvanized flat carbon steel, as the merged entity would have 40% control over the production capacities for the above products in the European Economic Area.

As part of the investigation, the EC had reviewed more than 800,000 internal documents and feedback from more than 200 customers.