The European Commission has cleared an operation whereby Finnish metals company Outokumpu Oyj will sell its zinc and copper mining and smelting activities to Boliden AB, a Swedish mining and metals group.
At the same time, Outokumpu will acquire Boliden's brass and copper businesses. As a result of the transaction, which also involves the acquisition of shares, Outokumpu will take control of Boliden.
This transaction mainly affects the markets for copper sanitary tubes and copper industrial tubes.
The deal will reinforce Outokumpu's position in the European market for copper sanitary tubes as second behind Società Metallurgica Italiana.
The Commission's review focused on the deal's impact in the Nordic countries, where Outokumpu's presence will be stronger. The EU determined that there would remain sufficient actual and potential competition from other manufactures of copper sanitary tubes but also from manufactures of plastic-based sanitary tubes to offset any price increase that the new entity might impose in the region.
Regarding copper industrial tubes, Outokumpu/Boliden will become number two on the European market after the transaction. However, the increment in market shares is not likely to create or strengthen any dominant position since SMI will remain market leader. Other competitors include Wieland-Werke and Halcor.
Copper sanitary tubes are used for the distribution of water and energy inside a building. They can be made of various materials such as copper, plastic, multi-layer (plastic and aluminum), steel and stainless steel.
Copper industrial tubes are used for various industrial applications, such as air-conditioning and refrigeration, heating, ventilation, electric and telecom applications.