The Austrian Federal Competition Authority (AFCA) received notification of the Acerinox/Haynes merger on 20 March 2024.
In the AFCA's view, the planned merger raises competition concerns and cannot be cleared in its current form. It therefore applied to the Cartel Court for an in-depth review of the merger (Phase II) on 30 April 2024.
Following an application for another two-week extension by the notifying parties, the deadline for completion of the examination was moved to 2 May 2024.
Background
According to the merger notification (Z-6531) Acerinox S.A. plans to acquire Haynes International, Inc. by way of a merger with one of its subsidiaries. Ultimately, the acquiring company intends to gain sole control of the target company.
Acerinox is a stainless steel manufacturer based in Spain. Acerinox is also engaged in the field of specialty alloys via its German subsidiary VDM Metals. Haynes is a company based in the USA. Both companies produce, among other things, specialty alloys, specifically nickel and cobalt alloys.
AFCA examination and competition concerns
In the course of its merger examination, the AFCA gathered large amounts of data and questioned competitors, and customers in particular. This provided a better basis for a precise definition of their markets than the information given by the notifying parties. Overall, there are also concerns about the acquirer’s extensive market shares. Irrespective of a more exact market definition, the merger would further increase Acerinox’s market position in the area of nickel alloys, which could impact negatively on competition.
In summary, the AFCA identified strong competition concerns in the following markets and submarkets:
- Production and sale of nickel alloy flat products
- Production and sale of plates, sheets and strips as submarkets of nickel alloy flat products.
Specifically, the AFCA fears that the merger would considerably reduce horizontal competition intensity, resulting in higher prices due to a lack of competition. This would be caused by such factors as the involved companies’ high market shares, and also – in the AFCA’s opinion – by entry barriers for potential new market participants in the relevant markets.
In conclusion, the AFCA found that the merger could not be cleared in its current form but required an in-depth review by the Cartel Court. The AFCA has therefore filed a request with the Cartel Court for an in-depth review. The Federal Cartel Prosecutor has also made a request for examination by the Cartel Court.