- Australian Refined Alloys NSW
SummaryRenewed Metal Technologies through its related entities had entered into an agreement with Nyrstar NV and Sims Metal Management to acquire their interests in the NSW secondary lead production facility Australian Refined Alloys.
Market definitionThe ACCC considered the proposed acquisition in the context of the following relevant markets:
(a) national and regional markets for the acquisition of used lead acid batteries (ULABs);
(b) the national market for the collection and transport of ULABs, in which RMT's related company, Orbitas Pty Ltd, competed;
(c) the global market for the supply of refined lead and lead alloys.
Competition analysisThe ACCC formed the view that the proposed acquisition was unlikely to result in a substantial lessening of competition in any relevant market for the following reasons:
- At the national level, the proposed acquisition would reverse the relative market shares of ARA and RMT and would not significantly increase concentration. Post acquisition RMT would continue to be constrained by ARA Victoria and other competitors.
- At the regional level, the ACCC considered that RMT would likely be constrained from imposing a reduction in ULAB prices post-acquisition by the following factors:
o competition from existing and new competitors that have the ability to increase consumption of ULABs in response to a sustained decrease in prices;
o the threat of new entry by battery breakers; and
o the countervailing power of major ULAB suppliers which have the ability to withhold supply or alternatively supply competing customers interstate in response to a sustained decrease in prices.
- Further, information provided to the ACCC did not conclusively establish that it would not be feasible to supply ULABs between regions, and indeed there were examples of ULABs being frequently transported interstate.
The ACCC considered that the above constraints would also be likely to prevent the merged firm from engaging in foreclosure strategies against competitors of Orbitas in the national market for the collection and transport of ULABs.
In relation to the global market for the supply of refined lead and lead alloys the ACCC found that pricing in this market is determined by reference to the London Metal Exchange price for lead and that RMT would be likely to be competitively constrained by other domestic and imported sources of refined lead and lead alloys post-acquisition.
|23/11/2011||ACCC commenced review under the Merger Review Process Guidelines.|
|09/12/2011||Closing date for submissions from interested parties.|
|20/12/2011||ACCC requested further information from Renewed Metal Technologies.|
|16/01/2012||ACCC timeline suspended pending receipt of outstanding information requested from RMT. Former proposed decision date of 27 January 2012 delayed.|
|23/01/2012||Parties provided the ACCC with further information. ACCC timeline recommenced.|
|08/02/2012||ACCC announced it would not oppose the proposed acquisition.|