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Brussels, 29th April 1997

The European Commission authorises the acquisition by the Hoogovens Group of 50% of Usines Gustave Boël

Koninklijke Hoogovens NV (Hoogovens) is an integrated steel and aluminium producer. In addition to its production of steel and aluminium, Hoogovens is active in the distribution and further processing of these products and in the provision of related technical services. Usines Gustave Boël (UGB) is an integrated steel producer. It manufactures hot and cold rolled coils, galvanised and pre-painted strip and wire rod at its plant in Belgium and at its wholly owned French subsidiary Fabrique de Fer de Maubeuge (FFM). In addition the company has a number of steel distribution operations, a wire products division and a controlling interest in a tube maker.

The current owners of UGB will transfer their shares to Galvabel, these shares will be sold to Newco for a nominal sum. Hoogovens and Galvabel will then each subscribe for 50% of the shares of Newco. Hoogovens will also provide Newco with a five year convertible loan and has an irrevocable option to buy Galvabel's shares in Newco.

The low shares of production, distribution and apparent consumption arising from the proposed operation and the fact that the new entity will face competition from several larger steel production and distribution operations (including, Usinor Sacilor, British Steel, Thyssen, Krupp-Hoesch, Arbed, Cockerill Sambre and Riva) show that the proposed operation would not give Hoogovens/UGB the power to determine prices, to control or restrict production or distribution or to hinder effective competition in a substantial part of the market for the various products.

The proposed operation will not give the combined Hoogovens/UGB operation the power to escape the competition rules of the ECSC Treaty. The acquisition therefore fulfils the conditions for authorization set out in Article 66.2 of the ECSC Treaty and the Commission has authorised it.

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