South Africa’s Competition Commission on Thursday announced that it has found no competition concerns regarding the acquisition by LNM Holdings NV of South African steel producer Iscor.
The next step in the regulatory process will be for the Competition Tribunal to consider the matter. If the tribunal approves the acquisition, LNM will be able to increase its stake in Iscor to more than 50% from its current level of 49,9%.
“We are of the view that the merger is unlikely to affect competition substantially in the markets for steel products as there is no overlap in services or products of the firms concerned in South Africa. The merged entity’s market shares are also small in global context,” said the Competition Commission’s mergers and acquisitions manager, Lizel Blignaut.
Several trade unions participated in the merger proceedings and made submissions. They expressed concerns regarding the effect of the merger on employment.
“Our investigation revealed that the continuing retrenchments were not as a result of the merger under review,” Blignaut added.
Minister of Trade and Industry Mandisi Mpahlwa also made a submission on public interest grounds.
The commission considered Mpahlwa’s submissions and found that the merger will not have significant negative effect on public interests.
The commission noted that after amicable and constructive discussions between the Department of Trade and Industry and LNM Holdings, an agreement was reached on the development of a sustainable and competitive pricing model for the South African steel industry.
It is hoped that this will produce some positive outcome regarding the price of steel for local purchasers. — I-Net Bridge