Fletcher Building steel sale gets OK

Last updated 12:39 16/04/2014
Otahuhu steel mill

CLOSING DOWN: Fletcher Building's Otahuhu steel mill will be decommissioned in 2015 as a result of the sale.

Relevant offers


CentrePort 'plenty big enough' for public listing NZX-listed wine company Delegat Group opens office in Shanghai Auckland mall space 'explodes' as new retailers demand more space Christmas spending hopes high, despite economic storm clouds Temporary Jetstar terminal moved into place at New Plymouth Airport Matt Bowden's Stargate Operations owes more than $1.4m to creditors MBIE proposes more changes to reduce misuse of Financial Services register Vodafone apologises to fuming customers over internet outage in Wellington Did Coke influence anti-obesity group Global Energy Balance Network? Surge in new jobs sees Bay of Plenty unseat Auckland as strongest region

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.

Ad Feedback

- Fairfax Media

Special offers

Featured Promotions

Sponsored Content