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- State aid C2/94
- Steel industry: capital injection into Klöckner Stahl GmbH
- Germany, Duisburg

On 26 January 1994 the Commission decided to initiate proceedings under
Article 6 of the Steel Aid Code in respect of possible aid elements of the
injection of capital into Klöckner Stahl GmbH (IP/94/51).  In November 1993
the Commission learned that a group of four new shareholders (the Bremen
group) was ready to take a stake in Klöckner Stahl GmbH by making a
substantial capital injection of DM 250 million.  The Commission expressed
doubts about whether the majority of the capital in the new company was
genuinely private and about the risks associated with the transaction, most of
the new capital coming from public-sector shareholders.  The Commission
therefore wondered whether the State's behaviour was really that of a prudent
market-economy investor.

After the proceedings had been initiated, the German authorities informed the
Commission that a contract had been signed between Sidmar, Klöckner Werke and
the Bremen group under which Sidmar was to acquire a 25% holding in Klöckner
Stahl. This transaction will be accompanied by an injection of risk capital
of DM 125 million by Sidmar, which will ultimately play the role of industrial
leader in the group.

Even if Bremen Vulkan Verbund AG (BVV), a member of the Bremer Vulkan group,
were to be regarded as a public-sector company, the majority of the capital
(at least 56%) in the new entity is now indisputably held by private

The new contract provides that all the new shareholders (the Bremen group and
Sidmar) will inject, under the same conditions, an amount of risk capital
proportional to their stakes in the new company.

Lastly, the agreement provides that the holding of Sidmar, the industrial
partner, will be increased in the future.

Under these conditions the behaviour of the public shareholders in the company
is absolutely the same as that of the private shareholders.  The public
shareholders are subject to no obligations additional to those incumbent on
the majority private shareholders.  The Commission therefore takes the view
that the behaviour of the public shareholders is comparable to the normal
behaviour of a private investor in a market economy and that the injection of
public capital into Klöckner Stahl GmbH does not include any elements of state

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