The Competition Commission conditionally approves Macsteel’s application to acquire certain assets of Robor

The Commission has conditionally approved the proposed merger whereby Macsteel Service Centres SA (Pty) Ltd (MSCSA) intends to acquire assets from the liquidation of Robor (Pty) Ltd. MSCSA produces and distributes a broad range of steel products including carbon steel, stainless steel, speciality steels and aluminium products.

MSCSA’s tubes and pipes division (MT&P) is the most relevant for this transaction. The products produced by MT&P are the standard tubes and pipes, limited to small bore products. This includes structural steel tubes and straight-line steel pipes. Structural steel tubes are typically used as a construction element and form of support in built structures, mining support systems, fencing, hi-tensile scaffolding and furniture. Steel pipes are used for the transmission (conveyance) of liquids, oils and gasses. MT&P also offers other value added products.

As recently as 2018 Robor invested in a fully automated mill capable of producing 60 000 tons of steel product per year. The company was liquidated the following year

Pursuant to a liquidation order granted by the South Gauteng High Court in September 2019, Robor has been put in liquidation. The Robor Assets are primarily the assets which form part of Robor’s tube and pipe operations. These assets comprise those used in the manufacturing business previously supplying standard small-bore tubes and pipes and open sections. In addition, the Robor Assets also include assets previously supplying value-added products.

The Commission found that the proposed transaction is unlikely to result in a substantial prevention or lessening of competition in any relevant markets. With respect to public interest considerations, particularly employment, the Commission received employment concerns in relation to pre-merger retrenchments. In this regard, the merging parties agreed to conditions that the merging parties shall fill the available vacancies with the employees that MSCSA has retrenched during the above mentioned processes, and in the event that none have the required qualifications, skills, know-how and experience, with the Robor employees with the required qualifications, skills, know-how and experience.

Secondly the merging parties shall fill all vacancies that arise beyond the available vacancies for a period of three years post implementation date with the affected employees with the required qualifications, skills, know-how and experience. Where former MSCSA employees are unable to fill any such vacancies, the merging parties will give first preference to the Robor Employees, with the required qualifications, skills, know-how and experience to fill such vacancies for a period of three years from the Implementation date.