Evraz buy of Highveld conditionally cleared by EU

Evraz buy of Highveld conditionally cleared by EU

	Published : Tue, 20 Feb 2007 19:24 By : Agencies Print this Story

BRUSSELS (AFX) - The European Commission said it has cleared steel company Evraz Group SA's proposed acquisition of South Africa's Highveld Steel and Vanadium Corp Ltd, subject to conditions.

The commission said it found that the transaction as initially notified would give rise to competition concerns 'at all levels of the vanadium value chain'.

However, Evraz has offered to divest an equity interest or a proportion of Highveld's large iron and vanadium mine in Mapoch, South Africa, together with Highveld's vanadium oxides and vanadium finished products activities, also based in South Africa, the EU executive said.

'The remedies would eliminate the merged entity's ability and incentive to exploit its strong position in vanadium feedstock and remove all overlaps between Evraz and Highveld for vanadium oxides and vanadium finished products,' the commission said.

In the light of these commitments, the commission said the transaction would not significantly impede effective competition in the European Economic Area.

Vanadium is a metal primarily used in the production of alloys, rust resistant and high speed tool steels and specialty stainless steel for use in surgical instruments and tools.

Evraz is an international vertically integrated steel and mining company. It also has joint control of Strategic Minerals Corporation, which produces a number of vanadium products.

Highveld is a steel producer also active in the production of various vanadium products.

In mid-July last year, Evraz and Credit Suisse said they have each acquired 24.9 pct each of Highveld from Anglo American.

A joint announcement by the three companies said Evraz has an option to increase its stake once regulatory approvals are received and will then be entitled to buy Anglo American's remaining 29.2 pct stake as well as the 24.9 pct holding of Credit Suisse through separate option agreements.

Should Evraz increase its interest beyond 35 pct, it will be obliged to make an offer to all shareholders of Highveld.

On implementation of the Anglo American option arrangement, the aggregate amount that will have been realised by Anglo American for its 79 pct interest in Highveld is 678 mln usd, equivalent to an average of 62.36 rand per Highveld share, representing a 13 pct premium.

simon.zekaria@thomson.com

sz/har

The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.

AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited