Brussels, 06/12/2000 (Agence Europe) - After an in-depth investigation, the Commission authorised a merger operation between the two largest European producers of stainless steel, Outokumpu Steel (Finland) and Avesta Sheffield (United Kingdom/Sweden). This operation will create the world's second largest producer in the sector with a market capitalisation of EUR 1.3 billion, a turnover of around EUR 2.5 billion, 8,700 employees and an annual production of 1.7 million tonnes of stainless steel. Named AvestaPolarit, the new company will be quoted on the Stockholm stock market and will be jointly controlled by Outokumpu Oyk and Corus Group Plc, mother company of Avesta.
The Commission examined the effect of this operation in several sector: the hot and cold rolled stainless steel flat products, stainless steel tubes, stainless steel fittings and steel distribution. It also granted special attention to the geographic market concerned by the operation, the partners being heavily present in the Nordic countries. It reached the conclusion that the intra-Community trade was heavy in this sector and that imports of this kind of product in Denmark and other Nordic countries from other regions of the Community were high. The investigation showed that the operation did not raise any competition problems for the specific sectors of stainless steel tubes, fittings for tubes and the distribution of this kind of steel. Concerning that hot and cold rolled flat products, the operation will lead to a reduction, by five or six, in the number of European producers of this product, namely: AvestaPolarit, ALZ (Belgium), Krupp Thyssen Stainless (Italy/Germany), Acerinox (Spain) and Uhine (France). Having taken into consideration the method of functioning of the market, the Commission felt that agreements between these competitors (price fixing, barriers to other competitors) remain difficult and thus authorised the operation.