Takeover would create virtual steel monopoly within NZ

BY Libby Middlebrook

Fletcher Challenge has conceded a takeover of Wellington-based Steel and Tube Holdings would consolidate nearly all aspects of the New Zealand steel industry.

Fletcher Challenge Steel has applied for Commerce Commission approval to take 100 per cent of Steel and Tube, which is valued at about $150 million.

In its application, Fletcher Challenge said the takeover would consolidate all aspects of the steel industry, apart from rod and wire processing and only slight aggregation of the roofing market.

The public copy of Fletcher's application does not contain market share data.

Fletcher Challenge Steel, which has subsidiaries Pacific Steel and Cyclone, is one of New Zealand's largest steel producers and distributors.

Fletcher Challenge is understood to be just one of several parties negotiating to buy Broken Hill Proprietary's 50 per cent shareholding in Steel and Tube.

BHP is looking for a buyer through CS First Boston.

Broken Hill spokeswoman Mandy Frostick would not reveal how many companies were negotiating to buy the shareholding, but said the company would sell by early next year.

The Commerce Commission is expected to announce it decision on the Fletcher Challenge takeover late next week.