The Austrian Federal Competition Authority (Bundeswettbewerbsbehörde – BWB) has referred the proposed acquisition of US alloy steelmaker Haynes International by Acerinox due to competition concerns, Kallanish notes.
BWB says the proposed merger should not be approved in its current form and has therefore submitted an application to the Cartel Court for in-depth examination (Phase II).
“As part of its merger control review, the BWB collected extensive data and conducted surveys of competitors and, in particular, customers. The results provided evidence for a narrower market definition than that put forward by the notifying parties. Overall, there are also concerns due to the acquirer’s very high market shares. Regardless of the exact market definition, the merger would lead to a further strengthening of Acerinox’s market position in the nickel alloy products sector, which could have a negative impact on competition,” BWB says.
The authority says there are strong competition concerns in the manufacture and distribution of nickel alloy flat products, and manufacture and distribution of plates and sheets as well as strips as submarkets of nickel alloy flat products.
“There is a risk of a considerable reduction in the intensity of horizontal competition, which would result in higher prices due to a lack of competitors. This is due, among other things, to the high market shares of the companies involved and, in the BWB’s opinion, to entry barriers for any new market participants in the relevant markets,” BWB adds.
Haynes says it is “disappointed by the BWB referral given the company’s limited presence in Austria, but plans to continue to engage cooperatively with the BWB and the Cartel Court.” It adds it “remains optimistic that the ultimate outcome of the Phase II investigation will be positive.” The firm continues to expect the merger will close in the third quarter.
Adam Smith Poland
