The Competition Tribunal has unconditionally approved steel manufacturer ArcelorMittal South Africa’s (AMSA’s) acquisition of the manufacturing and production of structural steel and rail business of Highveld Structural Mill (HSM), a subsidiary of Evraz Highveld Steel and Vanadium.
HSM, in eMalahleni, Mpumalanga, is the only company capable of producing heavy sections of long steel in South Africa.
Evraz Highveld, along with HSM, went into business rescue in April 2015 and ceased production owing to weakened global markets and reduced domestic steel demand, besides other factors.
However, HSM resumed operations in 2017 after it and AMSA concluded a contract manufacturing agreement for HSM to process blooms and slabs supplied by AMSA into heavy structural steel.
AMSA announced in April last year that it planned to buy HSM for an initial R150-million, plus a possible further R150-million, conditional upon it securing a long-term offtake agreement for supplying the mainline rail industry.
At the time, AMSA said the acquisition would ensure the country retained a regionally strategic steel-manufacturing capability.
The Competition Commission’s assessment of the proposed acquisition had determined that there would be no anticompetitive effects and it recommended that the tribunal approve the transaction.