BlueScope Steel Limited - s.87B undertaking

Company or individual details

  • BlueScope Steel Limited
    000 011 058

Undertaking

On 6 March 2014, the ACCC announced that it had accepted an undertaking (the Undertaking) from BlueScope Steel Limited (BlueScope) in relation to its proposed acquisition of the OneSteel Sheet and Coil business from Arrium Limited (the Proposed Acquisition).

The ACCC considered that, in the absence of the Undertaking, the Proposed Acquisition would have the effect, or would be likely to have the effect, of substantially lessening competition in sheet and coil distribution in Western Australia.

The ACCC has concluded that post-acquisition BlueScope would be unlikely to be constrained by:

a) existing sheet and coil alternative distributors - the lack of processing capability would limit these distributors’ ability to be a strong alternative;
b) imports - for most sheet and coil distribution customers direct imports of processed and unprocessed sheet and coil products are not a viable alternative due to logistical and scale issues; and
c) the likelihood of entry or expansion - barriers to entry and expansion are high and are likely to be increased by the proposed acquisition.

The objective of the Undertaking is to address the ACCC’s competition concerns, which would otherwise arise as a consequence of the Proposed Acquisition. The Undertaking aims to achieve this objective by:

a) ensuring the maintenance of a viable, effective, stand-alone, independent and long term competitor of the merged business in sheet and coil distribution in Western Australia which is able to provide processing services to third parties using equipment located in Western Australia;
b) ensuring the Approved Purchaser has the necessary assets to compete effectively with BlueScope to supply processing services to sheet and coil distribution customers using equipment located in Western Australia;
c) ensuring the continuous supply by BlueScope to the Approved Purchaser of any goods or services that are required by the Approved Purchaser to be established as a viable, effective, stand-alone, independent and long-term competitor;
d) ensuring the provision of any Technical Assistance by BlueScope required by the Approved Purchaser to operate the Divestiture Assets;
e) preserving the Divestiture Assets prior to divestiture; and
f) providing for the effective oversight of BlueScope's compliance with this Undertaking.

As part of accepting the Undertaking the ACCC approved Selection Steel as the Approved Purchaser of the Divestiture Assets.

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