Brazil companies complain to watchdog about Vale acquisition
Brazilian steelmaker Cia Siderurgica Nacional (CSN) and port company Porto Sudeste have lodged complaints against miner Vale SA’s proposed acquisition of rival Ferrous Resources Ltd, antitrust regulator Cade said.
Vale’s plan to buy Ferrous from controlling shareholder Icahn Enterprises LP in a $550 million deal was announced in December.
Vale is also facing unprecedented scrutiny in Brazil following the collapse of a mining dam in the town of Brumadinho last month that likely killed hundreds in a deadly mud flow.
Cade’s technical staff in the superintendent’s office is currently reviewing the Ferrous acquisition. A Cade spokeswoman confirmed the complaints from CSN and Porto Sudeste, which were first reported in newspaper Valor Economico.
CSN said in a letter to Cade that the acquisition of Ferrous would give an even more dominant market position to Vale, which it says controls roughly 80 percent of Brazil’s iron ore market, restricting CSN’s access to logistical infrastructure.
In a separate letter, Porto Sudeste said that Vale would reduce competition in the iron ore market of southeast Brazil. Porto Sudeste currently ships iron ore from Ferrous and any move by Vale to shift these shipments to its own infrastructure could hurt the port.
Ferrous Resources currently produces 4 million tonnes of iron ore annually, according to a spokesman. Vale produced 366.5 million tonnes of iron ore and pellets in 2017, according to the company’s website.
Vale said in a statement that the proposed transaction does not have anti-competitive effects and would not hurt the Brazilian market.
CSN and Porto Sudeste did not respond to requests for comment.
Source: Reuters (Reporting by Jake Spring and Carolina Mandl Editing by Susan Thomas)