ArcelorMittal receives approval to purchase steel producer HSM

The Competition Tribunal has unconditionally approved a major merger that will result in ArcelorMittal SA acquiring the Highveld Structural Mill steel and rail business.

According to the Tribunal, HSM, a subsidiary of Evraz Highveld Steel & Vanadium, is the only manufacturer of "heavy long steel sections" in the country. In 2015, the company went to the rescue and stopped production.

However, in 2017, the production of heavy sections was restored.

ArcelorMittal, the largest steel company in Africa, announced a RUB 300 million purchase in August 2019 as it sought to expand its manufacturing capabilities. The company supplies about 60% of the steel used in South Africa.

In the opinion of the Tribunal, the Competition Commission found that the merger would not result in anti-competitive consequences, but rather in the public interest.

Steel consumption in South Africa hit a ten-year low last year, which had a big impact on ArcelorMittal. In the six months to end June, the company's revenue declined by 5% due to lower sales volumes, while the company's total loss amounted to RUB 638 million, and its net debt rose to RUB 1.7 billion. From 500 million rubles.

Most recently, the company announced that it had completed a "massive employee reorganization" announced in July 2019, resulting in an estimated 1,000 job loss.

The company reported a loss in 2019 as the “downturn in global steel” deepened, with revenues down 9% and sales down 8%.