Email takeover gets watchdog go-ahead

Australian listed steel companies Smorgon and the recent BHP spin-off, OneSteel, have jointly bid for Email. OneSteel is majority owner of New Zealand steel group, Steel and Tube (NZSE: STU).

The ACCC says its in-principle approval of the Email takeover follows undertakings by Smorgon and OneSteel relating to the exchange of information, the allocation of Email's businesses between the parties and the sale of certain Email businesses.

Acting ACCC chairman, Rod Shogren, says the decision is the culmination of a long and extensive assessment, dating back to April 2000 when Smorgon Steel made its initial bid for Email.

"During the course of the ACCC's inquiries some market participants expressed concern over the loss of Email, the largest independent distributor of steel products, to one or the other of the major distributors. If either Smorgon or OneSteel obtained the whole of Email it would have given them 50% of the metals distribution market.

"The proposed allocation of Email businesses between Smorgon, OneSteel and sale to third parties should minimise any potential anti-competitive effects of the merger."

Under the arrangements Smorgon and OneSteel will each have approximately 35% of the metals distribution market and independents the remainder.

The offer values Email at A$815 million or A$3.00 per share, with an arrangement in place for the company's appliance division to be sold to Swedish electronics group Electrolux for $485 million following the takeover.

A spokesman for the bidding companies, Graham Smorgon, says the announcement by the ACCC has removed an area of potential uncertainty for Email shareholders.

"Naturally, we are very pleased with the ACCC's decision, which should encourage remaining shareholders to accept our recommended offer with confidence."

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