EC approves acquisition of Germany’s Kloeckner & Co SE by private investment firm

The European Commission has approved the acquisition of Germany-based independent steel and metals distributor Klockner & Co SE by private investment firm SWOCTEM GmbH, it said in a statement released Sept. 27.

EC scrutiny of the acquisition occurred in response to concerns about fair competition within the distribution market for flat carbon steel products and enclosures.

The EC subsequently concluded that the acquisition would not raise competition concerns in light of the companies’ “limited combined market position” that would result from the proposed transaction.

Kloeckner & Co’s distribution and service network numbers 160 sites in 13 countries. Last year it shipped almost 4.7 million mt of products to its 90,000 strong customer base, and is particularly known for its advances in digital transformation of distribution, aiming to digitalize and largely automate its supply and service chain.

In August, the company announced that it had completed the acquisition of National Material of Mexico (NMM), an independent service center and materials supplier catering to automotive and industrial end markets in North America.

Swoctem, a company owned by German businessman Friedhelm Loh, is Kloeckner’s biggest shareholder and announced the intent of a takeover bid on March 13, as it aimed to raise its shares to more than 30% in the distributor to obtain more flexibility for future share purchases.

Under German finance law, a voluntary takeover offer has to be issued to all shareholders when shares cross the 30% threshold.

Loh, who has ties in various German steel enterprises, namely steel service center Stahlo, started investing in Kloeckner in 2016 and gained two seats on Kloeckner’s supervisory board when he increased his shares to 25.25% that year.

Platts, part of S&P Global Commodity Insights, assessed domestic hot-rolled coil prices in Northern Europe at Eur625/mt ex-works Ruhr Sept. 26, down 27.3% since March 30.

Euan Sadden