ArcelorMittal Nippon Steel India Ltd. — Combination C-2022/08/964

Notice under Section 6(2) of the Competition Act, 2002, filed by ArcelorMittal Nippon Steel India Limited CORAM: Mr. Ashok Kumar Gupta Chairperson Ms. Sangeeta Verma Member Mr. Bhagwant Singh Bishnoi Member

Order under Section 31(1) of the Competition Act, 2002

1. On 30th August 2022, the Competition Commission of India (Commission) received a notice under Section 6(2) of the Competition Act, 2002 (Act), given by ArcelorMittal Nippon Steel India Limited (AMNS/ Acquirer) regarding its proposed acquisition of certain assets of Essar Group viz., (a) Power Assets [Essar Power Hazira Limited (EPHL), Gandhar Hazira Transmission Limited (GHTL) and certain assets of Essar Power Limited (EPL)]; (b) Port Assets [Hazira Cargo Terminals Limited (HCTL), Ibrox Aviation & Trading Private Limited (IATPL), Essar Bulk Terminal Limited (EBTL), Essar Bulk Terminal Paradip Limited (EBTPL), Essar Vizag Terminals Limited (EVTL)] and (c) Other Assets [Snow White Agencies Private Limited (SWAPL), Bhagwat Steel Limited (BSL)]. All these assets shall be collectively referred to as Target Assets. Earlier, ArcelorMittal India Private Limited, a step-down subsidiary of a joint venture between the ArcelorMittal Group and Nippon Steel Corporation acquired Essar Steel India Limited (ESIL), which owned and operated a steel plant at Hazira, Surat, Gujarat (HSP). Post the said acquisition, ESIL has been renamed as AMNS. HSP has been having several commercial arrangements with the Target Assets. The Acquirer and other concerned parties have inter-alia envisaged share purchase agreements in relation to the Proposed Combination.

2. The Proposed Combination envisages acquisition of Target Assets by the Acquirer. The purpose of Proposed Combination is to ensure seamless supply of raw materials to HSP for smooth operations and functioning. As a part of the Proposed Combination, the parties also envisage certain ancillary arrangement such as release and relinquishment of certain third-party rights in certain lands and creation of a greenfield joint venture relating to liquefied natural gas.

3. The Acquirer is an integrated flat carbon steel manufacturing company, formed by way of a joint venture between ArcelorMittal S.A. Group (AM Group) and Nippon Steel Corporation, Japan (NSC). AM Group is a global integrated steel and mining company, having a strong presence in Europe, Africa and America and a relatively small presence in Asia, including India. The AM Group produces a broad range of high-quality finished and semi-finished steel products. Specifically, it produces flat products, including sheets and plates, and long products, including bars, rods, and structural shapes. It also produces pipes and tubes for various applications. NSC is a Japanese integrated steel producer. It makes a wide range of value-added steel products for automobiles, resources and energy, and civil engineering, construction, and railways sectors.

4. The Target assets are part of the Essar Group. EPHL, is a 2 x 135 MW power plant adjacent to HSP. EPL owns a 515 MW non-operational power plant at Hazira, Gujarat. GHTL is an interstate transmission licensee having a 400 kV transmission line with a length of 104.6 km from Gandhar (NTPC) switchyard to Hazira. EBTL operates an all-weather, deep draft dry bulk jetty with a capacity of under 25 million metric tonnes per annum (MMTPA) at the Gulf of Khambatt, Magdalla Port terminal. EBTPL operates an all-weather dry bulk terminal with a capacity of 8 MMTPA at Paradip Port. EVTL is the concessionaire of an all-weather, deep-water terminal with an existing capacity of 12

MMTPA at Visakhapatnam Port. IATPL is a holding company and does not have any commercial operation. HCTL is the holding company of EBTL and EBTPL. SWAPL is a private company, it currently operates a guest house and holds certain lands. BSL, previously known as Essar Steel Chhattisgarh Limited, has not commenced any business operations.

5. It is observed that the Proposed Combination is primarily for the purpose of catering to the input requirements of HSP. Subsequent to the Proposed Combination, the Acquirer will continue to operate the Power Assets for captive purposes of HSP. The Acquirer will also continue to use the port jetty/ berths operated by EBTL and EBTPL at Magdalla Port and Paradip Port. These facilities will be used to ship pellets from Udayabata, Paradip, Odisha to HSP. It has been inter alia stated in the notice that post the Proposed Combination, EVTL will operate its terminal at Vishakhapatnam port in a fair and non-discriminatory manner for third parties. The Commission notes that the Proposed Combination is a follow-on investment by the Acquirer to have effective integration of facilities that are incidental and complementary to the business activities of HSP. Thus, the Proposed Combination does not appear to change the dynamics of the concerned businesses in any significant manner. Accordingly, the Proposed Combination does not raise any competition concern.

6. Considering the material on record, including the details provided in the notice and the assessment of the Proposed Combination based on factors stated in Section 20(4) of the Act, the Commission is of the opinion that the Proposed Combination is not likely to have any appreciable adverse effect on competition in India. Therefore, the Commission approves the Proposed Combination under Section 31(1) of the Act.

7. This order may be revoked if, at any time, the information provided by the Acquirer is found to be incorrect.

8. The information provided by the Acquirer shall be treated as confidential in terms of and subject to the provisions of Section 57 of the Act.

9. The Secretary is directed to communicate to the Acquirer accordingly.