The Commission has cleared under the EU Merger Regulation the proposed acquisition of the German natural gas supplier and gas transportation network operator, Saar Ferngas AG (SFG), by Arcelor Luxembourg S.A. (Arcelor), a subsidiary of the ArcelorMittal group, also based in Luxembourg. The Commission's investigation found that the proposed transaction would not impede effective competition in the European Economic Area (EEA) or any substantial part of it.

Arcelor is a wholly owned subsidiary of the ArcelorMittal group, the world's largest steel producer and also active in the distribution of various steel products.

SFG is active wholesale gas supply, retail supply to industrial customers (including power plants), regional short distance gas transmission and gas storage. It controls a German regional gas transportation network operator, Saar Ferngas Transport Gmbh (SFT).

The transaction does not give rise to any horizontal overlaps.

There are competitive interactions between the parties' activities in Europe, given that SFG is active in the markets for gas supply to industrial customers and short-distance gas transportation and Arcelor sources gas used for its steel production and holds a participation in Dillinger Huttenwerke (DH), a customer of SFG.

The Commmission's investigation found that the operation would not give rise to vertical competition problems as SFG has a low market share on both the national and regional markets for natural gas supply to industrial customers in Germany and other alternative sources of gas supply are available at both levels.

The market for downstream gas transportation has been liberalised in Germany and access to the gas network for third parties is regulated. SFT faces competition in the region of Saarland which is covered by its transmission grid. Therefore, ArcelorMittal would have neither the incentive nor the ability to restrict access to natural gas supply to its competitors.

Given that ArcelorMittal's gas consumption (even including DH) represents a minor percentage of the total gas consumed by industrial customers in Germany at both regional and national level, the transaction is not likely to give rise to any market restrictions adversely affecting customers. [22 November 2007]