The competition regulator has raised concern about the market power of Bluescope Steel.
AAP reports that The Australian Competition and Consumer Commission (ACCC) called for comments on Bluescope’s proposed takeover of steel products maker Fielders on Thursday. The regulator believes that such a takeover could compromise competition in the industry.
The point is that the takeover could increase BlueScope's dominance of the steel cladding and guttering markets allowing it to dictate prices of its Colorbond product.
Also on Thursday, the ACCC said it would not oppose BlueScope's takeover of Orrcon Steel.
In this case, the ACCC found that competitors would not be made too dependent on BlueScope for pipes and tubing as a result of the takeover.
According to ACCC chairman Rod Sims, competitors could bypass BlueScope and import the pipe and tube inputs they acquire or buy them from Australian Tube Mills.
Fielders and Orrcon Steel are both owned by Hills Holdings who would earn $87.5 million if the deals were to go ahead.
Competitors claim that BlueScope campaigned successfully for anti-dumping tariffs against cheap steel imports and, as a result, now has the power to unreasonably increase prices.