- Metals Trading
SummaryOneSteel proposed to acquire Metals Trading
Market definitionThe ACCC did not consider it necessary to form a concluded view in relation to market definition. However, for the purpose of conducting this review, the ACCC considered the proposed acquisition in the context of:
(i) the markets for the acquisition of ferrous scrap metal from scrap originators, scrap collectors and scrap dealers in each of Victoria and NSW;
(ii) the markets for the supply of ferrous scrap metal to end users such as metal manufacturers, smelters and foundries in each of Victoria and NSW;
(iii) the market for the acquisition of non-ferrous scrap metal from scrap originators, scrap collectors and scrap dealers in Australia; and
(iv) the market for the supply of non-ferrous scrap metal to end users such as metal manufacturers, smelters and foundries Australia.
Competition analysisIn relation to ferrous scrap, the ACCC noted that Metals Trading represents a small proportion of scrap acquired, processed and exported in the states in which it operates. The ACCC also noted that there would remain a number of scrap processors post acquisition that would compete to acquire scrap. The ACCC considered that the ability of scrap processors to export scrap was likely to act as a constraint on the merged entity.
In relation to non-ferrous scrap, the ACCC noted that this type of scrap is generally higher value than ferrous scrap and is therefore more conducive to cross-state and international transport. The ACCC considered that this meant there would be a large number of scrap dealers across the country competing to acquire non-ferrous scrap. The ACCC also noted that OneSteel does not use non-ferrous scrap for its manufacturing operations so all the volumes it processes are on-sold either domestically or internationally. The ACCC formed the view that export-parity pricing is likely to continue to constrain the merged entity post-acquisition.
|22/03/2010||ACCC commenced review under the Merger Review Process Guidelines.|
|09/04/2010||Closing date for submissions from interested parties.|
|21/04/2010||ACCC announced that it would not oppose the proposed acquisition.|