The Australian Competition and Consumer Commission (ACCC) said it will not stand in the way of the proposed acquisition of the OneSteel Sheet and Coil business from Arrium Limited by BlueScope Steel Limited.
The ACCC announcement came after the Commission accepted BlueScope’s undertaking to sell its sheet and coil processing asses in Western Australia to an ACCC approved purchaser.
OneSteel Sheet and Coil is a distributer of a wide range of flat steel products, with distribution sites in Sydney, Brisbane, Adelaide and Perth. BlueScope, through its subsidiaries Sheet Metal Supplies and Impact Steel, is also a distributor of sheet and coil products from sites in Melbourne, Sydney, Brisbane, Adelaide and Perth, and the only domestic manufacturer for the majority of flat steel products supplied to sheet and coil distributors.
According to the news release by the ACCC, the Commission had conducted consultations with a range of market participants, rival sheet and coil distributors and industry associations and found competition concerns in sheet and coil distributions in Western Australia.
“In the Western Australian market the proposed acquisition would remove BlueScope’s main competitor and the only other alternative Distributor with significant processing capability,” ACCC Chairman Rod Sims said.
“The ACCC was concerned that, because of this, the proposed acquisition could have led to higher prices, less favourable terms of supply and a reduced range of products in sheet and coil distribution in Western Australia in the absence of the proposed divestiture.”
BlueScope has agreed to provide a court enforceable undertaking requiring it to sell its sheet and coil processing assets in Western Australia to an ACCC approved buyer. The ACCC clearance also includes approval of Selection Steel as the purchaser of the business.
Selection Steel is Melbourne-based sheet and coil distributor with operations stretching across all states.
“The divestiture of BlueScope’s sheet and coil processing assets to Selection Steel should enable Selection Steel to expand its operations in Western Australia and compete with BlueScope, particularly in the processing of sheet and coil products,” Mr Sims said.
“The ACCC is therefore satisfied that the proposed acquisition is unlikely to substantially lessen competition in sheet and coil distribution in Western Australia.”
The ACCC will issue a public competition assessment in due time. The undertaking is available on the register.