On 18 December 2006, Smorgon Steel and OneSteel announced a proposal to form a joint venture of their respective structural pipe and tube businesses (“Joint Venture”), subject to approval of the proposal by the Australian Competition and Consumer Commission (“ACCC”). In the same announcement, the two companies foreshadowed a new transaction structure (“New Transaction”) to bring about their proposed merger.
The ACCC today announced that it would not intervene in the proposed Joint Venture between OneSteel and Smorgon Steel.
Ray Horsburgh, Managing Director & CEO of Smorgon Steel, said: “Realisation of the synergies and benefits we see from the proposed merger between OneSteel and Smorgon Steel has been delayed, and this decision by the ACCC, which clears the way for the Joint Venture to proceed, will enable us to bring forward some of the synergies.”
Geoff Plummer, Managing Director & CEO of OneSteel, said: “The proposed Joint Venture allows OneSteel and Smorgon Steel to bring forward an improved supply and service offer to its pipe and tube customers as envisaged under the proposed merger between OneSteel and Smorgon Steel.”
Accordingly, Smorgon Steel and OneSteel will move to implement the Joint Venture at the earliest feasible date.
As previously announced, Smorgon Steel will nominate the initial CEO of the Joint Venture, and OneSteel will nominate the initial deputy CEO/CFO. The companies are pleased to announce that the CEO of the Joint Venture will be Mr. Tony Schreiber, currently General Manager, Smorgon Steel Tube Mills, and the deputy CEO/CFO will be Geoff Feurtado, currently General Manager, Pipe and Tube, OneSteel.
Today’s announcement by the ACCC relates only to the Joint Venture. Following this decision, OneSteel and Smorgon Steel will shortly finalise and announce their decision with respect to the New Transaction and seek the ACCC’s clearance to enable the proposed merger to be completed.