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UPDATE 1-EU to clear Outokumpu to buy $3.5 bln rival-sources
October 30, 2012 / 3:06 PM / 5 years ago

UPDATE 1-EU to clear Outokumpu to buy $3.5 bln rival-sources

(Adds ThyssenKrupp, Outokumpu, Commission comments)

By Foo Yun Chee and Tom Käckenhoff

BRUSSELS/FRANKFURT, Oct 30 (Reuters) - Finnish steelmaker Outokumpu will win regulatory approval for its proposed 2.7 billion euro ($3.5 billion) purchase of ThyssenKrupp’s Inoxum, two sources said on Tuesday.

Outokumpu, Europe’s No. 4 stainless steel producer, last month offered to sell Inoxum’s prized mill in Terni, Italy, to secure the European Commission’s approval. The Commission had said that an earlier proposal to sell Swedish operations was insufficient.

“There are indications the Commission will approve it with conditions,” said one of the sources, who is familiar with the matter.

National regulators from the 27 European Union member nations were briefed on the Commission’s decision last week, another source said.

ThyssenKrupp said it was optimistic it would be able to conclude the deal by the end of the year, creating the world’s biggest stainless steel producer.

Outokumpu and the European Commission declined to comment.

The Commission has set a Nov. 16 deadline for its decision, but it is likely to rule on the deal before that date.

Loss-making Outokumpu this month defended its offer to dispose of the Terni mill, saying that it still expected to the Inoxum deal to generate annual savings of about 200 million euros, down from an original estimate of 225 million to 250 million euros.

The Commission said in May that it was worried about the merged company’s high market shares in slabs and in hot-rolled and cold-rolled stainless steel products.

Outokumpu also competes with Spain’s Acerinox and Luxembourg-based Aperam. ($1 = 0.7749 euros) (Additional reporting by Terhi Kinnunen in Helsinki; Editing by Rex Merrifield and David Goodman)

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