CCI approves the transaction between Nippon Steel & Sumitomo Metal Corporation and Sanyo Special Steel Company Limited

On November 30, 2018, CCI approved (i) the acquisition of 51.5% shares in Sanyo Special Steel Company Limited (‘Sanyo’) by Nippon Steel & Sumitomo Metal Corporation (‘NSSMC’); and (ii) transfer of Ovako AB (‘Ovako’)[1] from NSSMC to Sanyo. NSSMC, Ovaka and Sanyo are collectively referred to as ‘Parties’. [2]

In its competition assessment, CCI found that the Parties overlapped in respect of sale of certain special steel products in India i.e., (i) specialty steel bars; (ii) seamless pipes; and (iii) rings. The combined market share of the Parties in the specialty steel bars segment was within the range of 15%-20% with less than 5% increment. In the segment of seamless pipes, the combined market share was under 5%. In the segment of rings, it was noted that Ovaka supplied rings for wind power bearings whereas Sanyo sells bearings for only automobiles. One of Sanyo’s subsidiaries was found to be in the process of entering the market for the manufacture and sale of fabricated materials for wind power bearings and had started manufacturing. However, the combined market share was found to be insignificant. Therefore, CCI concluded that this transaction was unlikely to cause AAEC in India.

[1] Wholly owned subsdiairy of NSSMC
[2]  Combination Registration No. C-2018/09/597

Published In:Inter Alia Special Edition- Competition Law - March 2019 [ English
Date: March 1, 2019