Posted on 16 Jan 2023
ArcelorMittal has received approval, without restriction, from Brazilian authorities to conclude the 100% acquisition of Companhia Siderúrgica do Pecém (CSP). So says the country’s competition regulator, Conselho Administrativo de Defesa Econômica (Cade), in a note monitored by Kallanish.
The acquisition is valued at $2.2 billion. The merchant slab producer is a joint venture between Vale (50% share) and South Korean companies Dongkuk (30%) and Posco (20%).
“Import-related elements and rivalry in the domestic steel slab market rule out the likelihood of ArcelorMittal exercising market power in the post-operative scenario,” Cade says.
The trade defence agency also points out that the semi-finished steel produced by CSP and ArcelorMittal "do not present characteristics or specificities that prevent their substitution by similar products from other suppliers”.
According to Cade, CSP and Ternium are the two main domestic suppliers of steel slab in Brazil, with a 30-40% and 50-60% share, respectively. All other steelmakers, ArcelorMittal, CSN, Gerdau and Usiminas account for less than 10% combined of the domestic slab market.
"We are confident in the positive closing of the operation," ArcelorMittal comments. “We are acquiring a modern, efficient, established and profitable business which further enhances our position in Brazil and adds immediate value to us.”
Concerned parties have 15 days to request a review of the decision. During this period, ArcelorMittal and CSP will continue to operate independently.
ArcelorMittal will continue to supply CSP’s customers in the Americas in the short term, following which it sees the mill as an important intra-group slab supplier. The group is evaluating the option to significantly increase CSP’s capacity and add rolling and finishing capabilities on a low-carbon emissions basis, ArcelorMittal confirms.
The CSP plant in the state of Ceará, northeast Brazil, produced its first slab in June 2016. The company has a production capacity of 3 million tonnes/year, through the blast furnace method. CSP has access via conveyors to the Port of Pecém, a large-scale, deep-water facility located 10km from the plant.
Source:Kallanish
