The Australian Competition and Consumer Commission has decided not to intervene in the proposed takeover of Email Limited by Smorgon Steel and OneSteel, Acting ACCC Chairman, Mr Rod Shogren, announced today.
"The ACCC's in-principle approval of the takeover is subject to finalisation of an undertaking that has been offered by the parties".
Finalisation is expected shortly.
"The parties have offered an undertaking in response to competition concerns expressed by the ACCC. It includes restrictions on the exchange of information between the parties, the allocation of certain Email assets between the parties and the sale of certain Email businesses".
The revised bid arrangements, whereby the bidding vehicle Smorgon Distribution Limited will remain wholly owned by Smorgon Steel rather than jointly owned by both Smorgon Steel and OneSteel, also alleviates some of the ACCC's concerns.
The ACCC's decision is the culmination of a long and extensive assessment, dating back to April 2000 when Smorgon Steel made its initial bid for Email. During the course of the ACCC's inquiries some market participants expressed concern over the loss of Email, the largest independent distributor of steel products, to one or the other of the major distributors. If either Smorgon or OneSteel obtained the whole of Email it would have given them 50 per cent of the metals distribution market.
"The proposed allocation of Email businesses between Smorgon, OneSteel and sale to third parties should minimise any potential anti-competitive effects of the merger", Mr Shogren said.
The arrangements mean that Smorgon and OneSteel will each have approximately 35 per cent of the metals distribution market and independents the remainder.
Mr Shogren said that the ACCC would work closely with Smorgon and OneSteel to effect the implementation of the undertaking to ensure that sustainable and effective competition is maintained in the market.