Fletcher Building steel sale gets OK
The Commerce Commission will allow an Australian-owned firm to buy New Zealand's only steel mills.
The commission said this morning it would allow the mooted $120 million sale of Fletcher Building's Pacific Steel unit to a subsidiary of Australian-owned BlueScope Steel.
The decision notes that although BlueScope's new business would be the only domestic producer of its type, imports from abroad meant the industry would not be made less competitive by the sale.
"Although the acquisition will consolidate the only two crude-steel production plants in New Zealand into one, there will be no substantial lessening of competition," the commission said.
Commission chairman Mark Berry said in a release: "The products supplied by BlueScope and Pacific Steel can be sourced through imports and the import price strongly influences the prices that BlueScope and Pacific Steel are able to charge.
"Post-merger, imports will continue to provide pricing pressure on the merged business."
In announcing the deal in February, Fletchers said $30m would be paid initially, with a further $30m to be paid once a new facility in Glenbrook facility was operational.
BlueScope will also buy working capital of the business, valued at $60m.
The sale affects 70 workers, but BlueScope has said "the majority" would be retained.
The transaction is expected to be completed by June 30.
- Fairfax Media