Navigation path

Left navigation

Additional tools

Other available languages: FR DE NL

IP/99/524

Brussels, 19th July 1999

Commission approves merger between British Steel (UK) and Hoogovens (Netherlands)

The European Commission has given green light to the merger between British Steel plc and Koninklijke Hoogovens NV. The sectors involved in this concentration are the production and distribution of steel products. The Commission paid particular attention to the situation that would arise on the tinplate market where the new entity would have a share of between 25% and 35% of all tinplate supply and a similar proportion for tinplate for beverage cans. However the investigation showed that the strong buying power of consumers and competition from other suppliers within and outside the European Union (EU) would suffice to prevent the companies from acquiring a market position incompatible with European Coal and Steel Community (ECSC) rules. With regards to the other products and services provided by both British Steel and Hoogovens, the Commission concluded that the operation is not likely to raise competitive concerns.

British Steel was formed in 1988 by vesting the assets of the British Steel Corporation into British Steel plc under the British Steel Act. Its main activities are the production and distribution of ECSC and EC steel products. Hoogovens is an integrated iron and steel maker and also produces aluminium. Furthermore, this company is active in several connected areas i.e. the distribution and transformation of steel and aluminium products and technical services.

The merger will be implemented by acquisition of British Steel by BSKH, a holding company specifically formed for the purpose, and by way of a public offer by BSKH for the Hoogovens ordinary shares. On completion of the merger, British Steel shareholders will hold approximately 60% of BSKH and Hoogovens shareholders the remaining 40%.

British Steel and Hoogovens are active on both ECSC markets, which were examined under Article 66 of the ECSC Treaty, and on EC markets, which fall to be examined under the EC Merger Regulation.(1)

With regard to the products examined under the EC Merger Regulation, the by the Commission concludes that the proposed concentration is not likely to create or strengthen a situation of dominant position in the overlapping sectors (i.e. tailored blanks, profiles, sandwich panels, tubes). In particular for profiles, a market on which the companies' activities overlap in the United Kingdom, Benelux, Germany, France and Ireland, the Commission noted that the new entity will face competition from other strong integrated producers such as Usinor, Thyssen Krupp or Arbed/Aceralia as well as a number of independent manufacturers.

With regard to the ECSC aspects of the operation, the companies' activities overlap on the following markets : semi finished products, hot rolled flat coils, uncoated cold rolled sheets, coated cold rolled sheets and tinplate. The parties are also active in steel distribution. On all these markets, the investigation carried out by the Commission showed that the parties would face competition from major steel companies including Usinor, Thyssen Krupp, Arbed/Aceralia and Riva-Ilva.

In particular, in the tinplate market, on which the new entity will hold a market share of around 25-35%, the investigation confirmed the presence of large and sophisticated purchasers whose very strong buying power all tinplate suppliers contacted have stressed. Furthermore, there is also a relatively strong pressure exercised by tinplate suppliers established outside the EU.

The Commission also examined the possible creation of oligopolistic dominance in the segment of tinplate for beverage cans which represents around 15% of the total tinplate consumption and on which, after the operation, three major suppliers including BSKH would have over 90% of the EU market. The investigation however confirmed that, inter alia, the buying power of the customers (of which there are only four), the pressure exercised by other materials (in particular aluminium) and the potential competition of other tinplate suppliers inside and outside Europe, are sufficient to eliminate the possibility of a joint dominance.

Consequently, the Commission has authorised the merger under Article 66 of the ECSC Treaty and declared it compatible with the Common Market under the EC Merger Regulation.

(1)Council Regulation (EEC) No 4064/89 of 21.12.1989 on the control of concentrations between undertakings, O.J. No L 395 of 30.12.1990, also available on the Internet : HYPERLINK http://ec.europa.eu/dg04/lawmerg/mergreg.htm http://ec.europa.eu/dg04/lawmerg/mergreg.htm


Side Bar

My account

Manage your searches and email notifications


Help us improve our website