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Due to market instability, CADE must analyze CSP's purchase proposal for ArcelorMittal, which was valued at US$ 2,2 billion
The purchase of CSP (Companhia Siderúrgica do Pecém) by ArcelorMittal, recently approved by CADE, was suspended due to a request for a review of market conditions made by Usiminas. With this, the sale will be analyzed in the coming weeks.
According to the document released by Cade, which has the signature of counselor Lenisa Rodrigues Prado, the decisions considered for the interruption of the sale were the risk of the market closing, the increase in costs for competitors and the possibility of sharing data.
In view of the request, the case was sent to the Court so that the best decision on the ArcelorMittal case could be taken, taking into account the reasons presented, so that, thus, the can ask for clarification.
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Revaluation of the purchase of ArcelorMittal
According to Usiminas, the main reason for CADE to have “barred” the purchase of CSP was the increase in costs in the steel sector for ArcelorMittal's competitors, if by chance the purchase is approved.
Because CSP is relevant in the steel market, if the new parent company does not maintain the prestige of competitors, the purchase could increase after the sale.
According to the CADE document: “The high demand and market share indexes indicate that CSP plays a relevant role as the main independent supplier of steel slabs nationally and, together with Ternium Brasil, the only non-integrated companies in the country to produce steel plates without performing rolling activity. It is necessary to verify if, when composing the economic group, CSP, in fact, could be encouraged to stop supplying steel plates to the main competitors, causing an increase in costs and the consequent damage to the downstream steel market plans”.
What does ArcelorMittal think about this?
With this refusal on the sale of CSP to ArcelorMittal, the steel company states that it will continue to operate independently for CSP, and that it will also collaborate with Cade for the approval of the purchase.
However, despite ArcelorMittal's good will, an analysis of the purchase of ArcelorMittal by CADE's Court is not yet foreseen.
