EC Clears Scholz AG Acquisition of Czech Recycler

The European Commission has announced it has cleared, under the EU Merger Regulation, the proposed acquisition of joint control of Czech Republic-based Kovosrot Group CZ a.s. by Scholz AG of Germany and the Austrian steel producer Voestalpine. After examining the operation, the Commission concluded that the transaction would not significantly impede effective competition in the European economic area or any substantial part of it.

Scholz AG trades, collects and processes ferrous and nonferrous metal scrap. Together with Voestalpine it controls Scholz Austria, which also trades in metal scrap and operates scrap yards in Austria and the Czech Republic.

Kovosrot trades, collects and processes metal scrap and is currently solely controlled by Scholz AG. Under the proposed transaction, Scholz AG and Scholz Austria would acquire joint control over Kovosrot.

The indirect entry of Voestalpine as a controlling partner in Kovosrot is the only change the proposed transaction would bring about. In view of the parties' relatively minor shares of metal scrap markets and considering Voestalpine's position as a steel producer, the Commission concluded that there would be no risk of any of scrap metal supplies being closed off to other steel and nonferrous metal producers, as a sufficient number of alternative and competing sources of supply and sale channels would remain in existence.

The transaction would not result in any horizontal effects since the shares of Kovosrot and Scholz Austria on the markets for the trade; collection and processing of metal scrap were already attributable to Scholz AG.