BlueScope Steel to buy production assets of Pacific Steel
BlueScope Steel cleared to buy steel production assets of Pacific Steel
16 April 2014
The Commerce Commission has granted clearance to BlueScope Steel (NZ) Limited to acquire Pacific Steel Group’s rolling mill and wire mill manufacturing operations in Auckland and its New Zealand long steel distribution, marketing and sales operations from Fletcher Steel Limited.
BlueScope manufactures and distributes flat steel products such as steel slab and sheeting. Pacific Steel manufactures and distributes long steel products such as billet, reinforcing bar and wire.
BlueScope will be the only manufacturer of these products in New Zealand as a result of the acquisition. However, the Commission is satisfied that the proposed acquisition will not have, or would not be likely to have, the effect of substantially lessening competition in separate markets for the supply of steel slab, steel billet, flat steel products and long steel products.
“The Commission found that the products manufactured by BlueScope and Pacific Steel did not overlap and did not exert any competitive pressure on each other,” said Commerce Commission Chairman Dr Mark Berry.
“Further, the Commission found that the products supplied by BlueScope and Pacific Steel can be sourced through imports and the import price strongly influences the prices that BlueScope and Pacific Steel are able to charge. Post-merger, imports will continue to provide pricing pressure on the merged business.”
A public version of the written reasons for the decision will be available shortly on the Commission’s website: www.comcom.govt.nz/business-competition/mergers-and-acquisitions/clearances/clearances-register/
BlueScope Steel (NZ) Limited is a wholly owned subsidiary of BlueScope Steel Limited, an ASX listed company. BlueScope Steel Limited’s New Zealand operations include steel production and iron sand mining. It produces a range of steel products including slab, hot and cold rolled coil, welded steel beams, pipes and hollow sections.
Pacific Steel Group is a business unit of Fletcher Steel Limited, a wholly owned subsidiary of Fletcher Building Limited. In New Zealand, Pacific Steel Group is comprised of three businesses: Pacific Steel; Pacific Wire; and Fletcher Pacific Fiji. Pacific Steel Group also produces a range of steel products including billet, reinforcing bar and coil, wire, rod bar and rod coil.