22 February 2006Forbes
Turkey's OYAK has pulled out of a deal to sell Arcelor part of national steelmaker Erdemir over concerns that it would be vetoed under competition laws, the CNN Turk news channel said. OYAK, an industrial group representing the army pension fund, won a privatization tender in October for 46.12 pct of Erdemir, Turkey's biggest steel company, with a bid of 2.77 bln usd, beating Mittal and Arcelor.In December, Arcelor reached a deal with OYAK to acquire 41 pct of Ataer, a company created by OYAK to purchase Erdemir, and thereby a 20.5 pct stake in Erdemir.OYAK opted to end the partnership after it received signals that Turkey's Competition Board would not approve the deal under antitrust regulations and decided to go ahead with the purchase on its own, CNN said.Arcelor and OYAK both declined comment.Turkey's privatization authority has reportedly set a March 6 deadline for OYAK to complete the purchase.OYAK was concerned that the Competition Board would raise objections to its partnership with Arcelor on the grounds that the deal would give the joint venture a dominant position in the market because of Arcelor's 40 pct stake in Turkish flat steel producer Borcelik, CNN Turk said.The collapse of the deal does not endanger Erdemir's privatization because OYAK has already secured loans to finance the purchase and would not need Arcelor's financial support, it said.The Competition Board is expected to approve on Thursday Erdemir's takeover by OYAK, now that the partnership with Arcelor has ceased to be an obstacle, according to the newspaper Hurriyet.Erdemir, Turkey's only flat steel manufacturer, produced 3.6 mln tonnes of steel and made a profit of around 470 mln usd in 2004.[email protected]mjs/hjp
