Finnish stainless steel firm Outokumpu has been given the green light to complete its acquisition of German steel company Inoxum.
The European Commission has approved the deal on condition that Outokumpu sells off Inoxum’s Italian steel mill in Terni.
The Commission had concerns that the combination of the two largest suppliers of cold rolled steel products would have given the merged entity the power to raise prices. Selling the Italian mill will allay these fears and the deal has been approved under the EU merger regulation.
Outokumpu chief executive Mika Seitovirta said: “Now Outokumpu can achieve significantly improved capacity utilisation rates, we will have an expanded presence in growth markets outside Europe and the widest product offering to serve our customers even better. The transaction enables us to achieve annual synergy savings of approximately 200 million euros and efficiencies that neither company could have achieved alone.”
Outokumpu will have six months to sell the Terni mill. The company said it had started the divestiture process and expects to find many potential buyers.
Outokumpu employs some 7,000 people in more than 30 countries. The group’s head office is located in Espoo, Finland. Outokumpu is listed on the NASDAQ OMX Helsinki.