EU approves Liberty House steel mills acquisition

The European Commission has approved United Kingdom-based Liberty House Group as a suitable purchaser of several ArcelorMittal steel plants.

The steelmaking assets, including a mill in Romania and another in Czechia, were sold because of commitments made by ArcelorMittal in order for it to buy the Ilva steelmaking assets in Italy. The arrangement was initially announced in October 2018.

In May 2018, the Commission approved the acquisition of Ilva by ArcelorMittal, but the Luxembourg-based steelmaker was required to divest certain steel plant assets to what the EU deemed a suitable purchaser. The divestiture was proposed by ArcelorMittal to address Commission concerns regarding effective competition in European hot-rolled, cold-rolled and galvanized flat carbon steel markets.

The package of assets that ArcelorMittal divested includes:

• an integrated steelmaking complex in Galati, Romania;
• another integrated steelmaking complex in Ostrava, Czechia; and
• steel finishing plants in Italy, Belgium, Luxembourg and North Macedonia.

The Commission says it has found Liberty House Group to be “a suitable purchaser of the ArcelorMittal assets, allaying the Commission’s concerns in the European markets for hot-rolled, cold-rolled and galvanized flat carbon steel.” The Commission, under the EU Merger Regulation, also approved the initial ArcelorMittal purchase of Ilva.

The Commission says, however, it “initially had serious concerns” about the Liberty House acquisition being “highly dependent on borrowed money, including from ArcelorMittal.”

Subsequently, the financing of the transaction has been amended so that Liberty House Group will provide a higher amount of equity for the purchase and ArcelorMittal will no longer provide Liberty House with financing, according to the Commission.