Watchdog approves BlueScope takeover

BlueScope Steel will proceed with its takeover of the Fielders steel business, after the competition regulator gave its stamp of approval to the acquisition.

The Australian Competition and Consumer Commission has announced it will not oppose BlueScope's acquisition of Fielders Australia from the Hills Group.

BlueScope welcomed the news yesterday.

"BlueScope is very pleased with the ACCC's decision to not oppose the acquisition of Fielders," a spokesman said.

"We now look forward to welcoming over 900 new employees to BlueScope as we begin final preparations to complete the transaction over the coming weeks."

The deal had been questioned by the ACCC as BlueScope, through its subsidiary Lysaght, is in direct competition with Fielders in the manufacture and supply of roll formed steel products, which are widely used in building projects.

ACCC chairman Rod Sims said after "extensive" market inquiries since early December, the ACCC had concluded the acquisition would be unlikely to substantially lessen competition in any relevant market.

"In reaching its decision, the ACCC considered that while BlueScope has market power in the supply of painted coil inputs through its Colorbond product lines, this level of market power would not be altered by the acquisition," he said.

"The ACCC determined that BlueScope does not already discriminate against other roll formers in favour of Lysaght in the supply of inputs and that there are strong economic incentives for BlueScope to maintain competitive supply to rival roll formers.

"These incentives include the need to operate the blast furnace at its Port Kembla steelworks at full capacity and the greater profits it earns on domestic sales over exporting excess production."

The ACCC found that while the deal represented the merger of the two main suppliers of steel formwork, customers "would continue to have strong alternative suppliers".

BlueScope is also buying the Orrcon steel businesses owned by Hills. That deal was approved by the ACCC late last year. Together the two acquisitions will cost $87.5 million.

Hills makes the iconic clothes line the Hills Hoist, but the company that manufactures it was not part of this deal.

BlueScope shares closed down 6¢ at $5.44 yesterday.

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