On Monday 7 May, the European Commission cleared the acquisition of Ilva by ArcelorMittal, subject to a divestment of assets by the Luxembourg company in order to preserve competition on the European steel markets.
This decision follows the opening of an in-depth investigation on 8 November 2017, following the notification of the transaction by the companies, both of which are active in steel (see EUROPE 11901). Whilst discussions were underway between the various parties, the Luxembourg State on 16 April expressed its concerns on maintaining the steel industry in the framework of the corrective measures proposed by ArcelorMittal (see EUROPE 12003).
“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”, said Margrethe Vestager, the Commissioner for Competition.
As notified, the operation would have meant that the future entity controlled more than 40% of production capacity for hot-rolled, cold-rolled and galvanised flat carbon steel products in the European Economic Area (EEA), giving it a far larger market share than any of its competitors.
To respond to the Commission’s concerns, ArcelorMittal proposed to sell production facilities in Belgium (Liège), the Czech Republic (Ostrava), Luxembourg (Dudelange), Italy (Piombino), Romania (Galati) and the Former Yugoslav Republic of Macedonia (Skopje). The company also proposed to divest various distribution assets in France and Italy. It furthermore offered to take Marcegaglia, an Italian company active in the production of galvanised flat carbon steel products, out of the consortium that is acquiring Ilva and not to acquire any shares in it.
As a result of these measures, the Commission felt that the transaction could preserve competition in the steel sector on the single market. ArcelorMittal must now propose purchasers to the Commission, which will then consider whether they are appropriate to ensure effective competition in steel.
“I am surprised by the speed of the decision taken by the Commission, which announced that it wanted to carry out a thorough investigation to know the exact scope of the acquisition file and the related impacts. I deeply regret the fact that the Dudelange site will have to leave the ArcelorMittal group to be sold to an unknown buyer” responded the Deputy Prime Minister and Minister of the Economy of Luxembourg, Étienne Schneider. (Original version in French by Lucas Tripoteau)