Issued 10 December 1999/129

Commission clears Fletcher Steel to acquire Steel and Tube

The Commerce Commission today cleared Fletcher Challenge Steel Products Limited to acquire up to 100 percent of the shares in Steel and Tube Holdings Limited.

Commission Chairman John Belgrave said that a majority of the Commission was satisfied that, should the acquisition go ahead, Fletcher Steel would not become dominant in any of the following identified national markets:

  • the distribution of merchant steel products;
  • the distribution and processing of steel plate products;
  • the distribution and fabrication of reinforcing steel;
  • the distribution and processing of steel coil products;
  • the manufacture and distribution of domestic roofing products; and
  • the manufacture and distribution of industrial roofing products.

This was Fletcher Steel's second application for clearance of the proposal. The Commission declined the first application on November 4.

The Commission's latest decision to clear the application is based upon further market enquiries and additional information, particularly with regard to the markets for the distribution of merchant steel products, and the distribution and processing of steel plate products. It was in these two markets that the Commission earlier had dominance concerns.

Public copies of the decision, detailing the reasons for granting clearance, will be available shortly.

Background

The Commerce Act prohibits business acquisitions that result in dominance being acquired or strengthened in any market.

Parties can apply for a clearance, which the Commission will grant if it is satisfied that dominance is not acquired or strengthened.

Both the proposed acquirer and the owner of the assets or shares have rights to have the Commission's decision reviewed by the High Court.

Media contact:

Commerce Act Manager Geoff Thorn. Phone work (04) 498 0958

Communications Officer Vincent Cholewa. Phone work (04) 498 0920