German copper smelter Aurubis will review other options for its flat rolled products (FRP) division, following the European Commission's decision today to veto a sale to German copper product producer Wieland Werke.
Aurubis said it still wants to sell the unit and that it has already identified alternatives. It declined to comment on the details, but said it would "find a prospect for FRP that will develop the business in the long term".
The commission prohibited Wieland's proposed acquisition of Aurubis' FRP unit and its stake in German producer Schwermetall, citing anti-competition concerns in relation to the rolled copper product and pre-rolled strip markets. Wieland was not willing to address all of these concerns, the commission said today.
The commission noted that the sale would have left Wieland with over 50pc of the European rolled copper market, by value, eliminating price competition between two major producers. And it added that European rolled copper buyers cannot access supplies from outside the European Economic Area because of import duties and delivery requirements.
And the deal would have impacted the pre-rolled strip market because of its effect on Schwermetall, co-owned by Aurubis and Wieland. Under the deal, Wieland would have purchased Aurubis' stake, which the commission ruled would cause Schwermetall to lose operational independence, and enable Wieland to raise input costs for smaller competitors or access their confidential information. Wieland had failed to demonstrate that its acquisition of Aurubis' stake in Schwermetall would result in efficiencies that could not be achieved by other means, according to the commission.
Wieland was willing to address these concerns by selling two Aurubus copper rolled product plants, but would not accept any sale of Aurubis' 50pc stake in Schwermetall.
The flat-rolled products segment produced 235,000t of copper and specialty wire in the 2017-18 fiscal year, up by 2pc.
Aurubis revealed in February 2018 that it was in advanced negotiations about selling its flat-rolled products business. The commission opened its investigation on 1 August.
Aurubis is Europe's largest copper producer and the world's largest copper recycler. It produces more than 1mn t/yr of copper cathode.
