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EU Commission launches in-depth investigation
of Metallo take-over by Aurubis


Metallo's site in Beerse, Belgium
20.11.2019 − 

The European Commission has concerns about the proposed acquisition of the Belgian-Spanish recycler Metallo by Aurubis. EU Competition Commissioner Margrethe Vestager announced on Tuesday that the Commission would be opening an in-depth investigation of the takeover under the EU Merger Regulation. The concerns centre on the effect the acquisition of Metallo by the German copper company might have on competition in the purchasing of copper scrap for refining. The Commission said it now had 90 working days, until 3 April 2020, to take a decision, and underlined that opening an in-depth investigation did not prejudge its outcome.

"Demand for copper is likely to increase, notably also due to the growing importance of electric cars. A well-functioning, competitive copper recycling industry is key to meet the future needs of European industry and to limit the impact on the environment. The Commission will carefully assess the merger between Aurubis and Metallo, the two leading copper scrap refiners in Europe, to ensure the transaction would not negatively affect competition in this important sector,” said Ms Vestager.

According to the Commission, if the merger were cleared, it would bring together the two largest purchasers and refiners of copper scrap in Europe. The merged entity would have large market shares in the purchasing and refining of copper scrap. Moreover, the Commission's preliminary examination had shown that the two companies were each other's closest competitors, in particular in the purchase and processing of complex and tin-bearing copper scrap. It was possible that for some sellers of these materials, Aurubis and Metallo were the only eligible customers.

Accordingly, the Commission said it was concerned at this stage that an acquisition would give the merged entity a dominant position in the procurement of copper scrap for refining, a position which it could use to negotiate lower purchase prices for copper scrap. The merger could thus disrupt the normal functioning of the copper recycling industry, lowering the incentives for recyclers to collect and sort copper scrap, said the Commission.

Aurubis has offered around €380m for Metallo Holdings, which is majority-held by the private equity fund TowerBrook Capital. Aurubis explained the acquisition as part of its "active pursuit" of its recycling strategy and its objective to evolve into a "multi-metal recycler". Beside its traditional primary and secondary copper business, the group is working to expand its other metal offerings such as nickel, selenium and tellurium and to double the volumes of non-copper metals its sells by the 2022/23 business year.

The multi-metal strategy had originally been developed parallel to the internal investment project "Future Complex Metallurgy" (FCM). The copper concern scrapped that project at the end of June after investment costs got out of hand and its forecasts for the project's cost effectiveness changed.

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