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’s proposed acquisition of rival Ferrous Resources, antitrust regulator CADE announced on Wednesday, February 13.

Vale’s plan to buy Ferrous from controlling shareholder Icahn Enterprises in a US$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 wrote 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% of Brazil’s iron ore market, restricting CSN’s access to logistical infrastructure.

In a separate letter, Porto Sudeste claimed 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 claimed in a statement that the proposed transaction will not have anti-competitive effects and would not hurt the Brazilian market.

Full Content: Reuters

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