Fair trade regulator clears Indian steel merger
A report on Economic Times said fair trade regulator Competition Commission of India (CCI) had given its approval of the proposed merger of Indian companies Shree Uttam Steel and Power and Uttam Galva Steels. CCI is said to be monitoring unfair trade practices in India.
The merger between two firms were said to be co-endorsed by the Miglani family and ArcelorMittal, which is the largest steel maker in the world. The the Miglani family owns 97% of Shree Uttam Steel and Power along with two other associate companies of Uttam Galva.
In its order that was made public, CCI said, "(The) proposed combination is not likely to have an appreciable adverse effect on competition in India... as per the information provided in the notice and publicly available documents, the market share of UGSL (Uttam Galva Steels Ltd), in the cold rolled steel and galvanized steel products is insignificant to raise any competition concern."
CCI had noted that there were several integrated steel companies and intermediate steel producers which, like Uttam Galva Steels, are engaged in the business of the products similar to what the latter produces.
The order also said Shree Uttam Steel and Power has not produced nor entered into an undertaking of any trading activities in the years 2012 and 2013, and should the manufacturing of Shree Uttam Steel and Power will be established, CCI said it would become a backward integration for Uttam Galva Steels.
In a separate order, CCI declared that Uttam Galva Steels has not incurred any penalties with regard to the delay in filing a notice to seek regulatory approval.
CCI stated, "It is observed that the delay in giving the notice... was for a period of less than a week and inadvertent. It has been submitted that the parties were in discussion with the officials of the Commission since November 14, 2013 for seeking clarification on the procedural requirements for giving the notice regarding the proposed amalgamation."