The Australian Competition and Consumer Commission has released a statement expressing its concerns over BlueScope's proposed acquisition of OneSteel Sheet & Coil business from Arrium Ltd.
Australian watchdog said that the proposed acquisition raises significant competition issues in relation to sheet and coil distribution in Western Australia. The ACCC indicated that the proposed acquisition is expected to remove OneSteel Sheet and Coil as an effective competitor and the main alternative to BlueScope in Western Australia, particularly for customers that require processed sheet and coil products.
The ACCC is not currently satisfied that other sheet and coil distributors in Western Australia would represent a viable alternative to BlueScope post-acquisition. Alternative sheet and coil distributors do not have processing capability and the barriers to obtaining processing capability appear high. The ACCC also considers that imports of processed and unprocessed sheet and coil products would not represent a viable alternative for most Western Australian customers of the merger parties.
As SteelOrbis previously reported, in October this year, BlueScope agreed to acquire OneSteel sheet and coil processing and distribution businesses in Sydney, Brisbane, Adelaide and Perth, anticipating net integration costs of $7 million.
