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Latest news for today in Ukraine
The Antimonopoly Committee of Ukraine (AMCU) allowed the international vertically integrated mining and metallurgical group of companies Metinvest to indirectly acquire the integral property complex of PJSC Dniprovsky Iron and Steel Works (DMK, Kamianske, Dnipropetrovsk region), which is part of the corporation Industrial Union of Donbas.
According to the AMCU on Thursday, the agency completed the consideration of the case regarding the granting of permission to Metinvest B.V. for the indirect acquisition of assets in the form of the integral property complex, which together provide economic activities for the production and sale of metal products, owned by Dniprovsky Iron and Steel Works.
At the same time, the sale of the integral property complex takes place within the debtor's rehabilitation procedure, Dniprovsky Iron and Steel Works, and is a necessary measure aimed at preventing the termination of activities and liquidation of the enterprise. Business entities belonging to the Metinvest group are among the creditors of Dniprovsky Iron and Steel Works, whose claims were recognized in the bankruptcy case.
When considering the case, such general product markets as steel billets, rods (rebar, other rods), small-sized and medium-sized structural shapes for general use, as well as the markets of wire rod, grinding balls of small and medium diameters, rough and semi-finished axles for railway transport, produced by DMK were assessed.
"Taking into account the insignificant aggregate shares of the participants of concentration in these markets, the AMCU granted permission for the declared actions," the committee said in the decision.
At the same time, the main attention of the AMCU was focused on the market of commercial cast iron.
"Despite the fact that the integral property complex does not include property, the use of which ensures the full cycle of production and/or sale of cast iron, the AMCU also assessed the consequences of the concentration, which consists in the consolidation of the assets owned or owned by DMK by the Metinvest group (including blast furnaces). In this regard, the AMCU concluded that this concentration may have an impact on the market for commercial cast iron," the committee said.
Thus, when considering the relevant case, it was found that there is an increase in the share of participants in the concentration on the market of commercial cast iron during 2018-2019 and nine months of 2020, and also that during the study period the production of commercial cast iron, except for participants concentration, carried out only by two business entities whose production facilities are located on the territory of Ukraine (excluding capacities in settlements where public authorities temporarily do not exercise their powers), in this case, the market position of the Metinvest group in the market may be strengthened commercial cast iron.
"Considering the above, the participants in the concentration were asked to take on obligations that could remove the potential negative impact on competition. Metinvest B.V. announced its readiness to take obligations that should condition the implementation of the appropriate concentration," the AMCU said.
At the same time, the main content of the obligations is to ensure the sale to the domestic market of Ukraine of at least 12,000 tonnes of commercial cast iron annually and at market prices. This volume is substantiated by data on the average annual sales of commercial cast iron by the DMK over the last three full years (2018-2020), which amounted to 11,130 tonnes annually (within three years after the concentration).
As part of the case consideration, the committee interviewed consumers, experts and competitors in the market for commercial cast iron and conducted a market test. The AMCU received no negative comments or reservations either to the content of the concentration or to the proposed obligations.
The committee assessed such balancing factors on the market for commercial cast iron, such as, in particular, that the market is in surplus. The aggregate demand on the Ukrainian market is significantly less than the potential supply of cast iron from the metallurgical enterprises of Ukraine. In addition, the market is export-oriented. At the same time, each enterprise independently decides on which markets (domestic or foreign) to sell cast iron, and the competitors of applicants have the opportunity to independently and fully satisfy the demand for cast iron in Ukraine by expanding on the domestic market by reorienting the sales of cast iron from export direction.
As of May 20, 2021, the AMCU did not receive other applications from potential buyers of the integral property complex. At the same time, if they are received, they will be considered in accordance with the established procedure.
Source: www.en.interfax.com.ua
