South32 deal under investigation by watchdog

Mining company, South32’s proposed $200 million takeover of Metropolitan colliery has hit a hurdle as regulators step in over competition fears.

The Australian Competition and Consumer Commission (ACCC) has received a complaint from BlueScope Steel which claims that the takeover will impact coking coal prices used in steel production.

“As a direct result of South32’s proposed acquisition of the Metropolitan Colliery, BlueScope is concerned about the lessening of competition which would likely have the effect of increasing coal prices for the majority of our coking coal requirements,” BlueScope said in a statement to Reuters.

If it went ahead, the deal would mean that South32 would become the only supplier available in the region for BlueScope and other steel companies.

The decision to investigate shows that authorities are increasingly becoming concerned with mergers and acquisitions which impact market competition.