Justice Department Requires Divestiture in Mittal Steel’s Acquisition of Arcelor
On August 1, the DOJ Antitrust Division announced that it would require Mittal Steel Company N.V. to divest one of three North American tin mills it will own after its $33 billion acquisition of Arcelor S.A. in order to proceed with the deal. After a thorough investigation, the DOJ concluded that the original deal would have adversely affected competition by eliminating constraints on the ability of tin mill products producers to coordinate their behavior and thereby increase the price of tin mill products to can manufacturers and other customers particularly in the eastern United States.
Prior to Mittal’s acquisition of Arcelor, two large firms—Mittal and one other integrated steel producer—accounted for more than 74 percent of all tin mill product sales in the eastern United States, but Arcelor, together with its subsidiary Dofasco, which operates a large integrated mill in Ontario, provided a significant competitive constraint on these two firms.
The proposed consent decree will preserve competition by requiring the divestiture of one of the three North American tin mills that Mittal will own following its acquisition of Arcelor—the Dofasco mill, currently owned by Arcelor, located in Hamilton, Ontario, Canada; Mittal’s Sparrows Point facility located near Baltimore, Maryland; or Mittal’s Weirton facility located in Weirton, West Virginia.