DOJ Reaches Settlement over Arcelor – Mittal Merger

On May 12, the DOJ's Antitrust Division announced that it reached a settlement agreement with Mittal Steel Company N.V. regarding its offer to acquire Arcelor S.A. The agreement would resolve potential antitrust concerns in the event that the Antitrust Division concludes the combination of Mittal and Arcelor raises anticompetitive concerns. Under the agreement, the DOJ will continue to investigate the competitive implications of the combination of Mittal and Arcelor — the world's two largest steel producers. The agreement requires Mittal to divest Dofasco Inc., currently owned by Arcelor, to ThyssenKrupp AG in the event the DOJ determines the combination of Mittal and Arcelor is likely to result in a substantial lessening of competition. If Mittal acquires Arcelor but is unable to divest Dofasco, the agreement requires Mittal to divest certain alternative assets to a buyer acceptable to the DOJ. The DOJ has determined that the divestiture of either Dofasco or the alternative assets would address the potential competitive problem identified by the Antitrust Division.
This agreement enables the Antitrust Division to complete its investigation and, if necessary, to implement an adequate remedy while Mittal's tender offer proceeds. The Hart-Scott-Rodino (“HSR”) Act imposes notification and waiting period requirements on parties to transactions that exceed certain thresholds. The waiting period enables the Division to investigate transactions before they are consummated so that the Division may seek to modify or block deals that it concludes are anticompetitive before they close and competition is harmed. In appropriate circumstances, the Division may allow the waiting period to expire before it has concluded its investigation, if it reaches an agreement with the parties that ensures an adequate remedy will be implemented and if the Division ultimately determines that one is necessary.