,3 Brussels, 21 November 2001

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The operation consists of a merger of all the businesses of Aceralia, Arbed and into a new single corporate entity, provisionally called NewCo . Newco, with an estimated total crude steel production of around 45 million tons, will be active on virtually all sectors of the production and distribution of steel. The parties' activities overlap particularly in the production of flat steel products and in the distribution of carbon steel. On 19 July 2001, the Commission launched an in-depth investigation under the ECSC Treaty in the following markets: hot rolled flat steel products, cold rolled flat steel, quarto plates, steel for packaging, galvanised steel, organic coated carbon steel, stainless steel, and the related distribution markets. After an exhaustive market investigation and a careful examination of the arguments submitted by the parties, the Commission concluded that the operation would give the parties the power to hinder effective competition in the markets for galvanised flat carbon steel products and in some distribution markets in and in Spain/Portugal. In 2000, sales of galvanised steel amounted to 21 million tonnes in the EU, which represents around 30% of total EU sales of flat carbon steel products. Galvanised steel is mainly produced from cold-rolled flat carbon steel, through two different production process: hot-dip galvanising and electro-galvanising. Both hot-dip and electro-galvanised steel are used in a number of industries, but particularly in the automotive and construction sectors. The automotive industry, which requires by far the highest quality standards, accounts for over 50% of the total sales in this market. In the market for galvanised products, Newco would be the undisputed market leader, with market shares in terms of capacity, production and sales much higher than those of its main competitors. In addition, factors such as the current constraints of existing capacity, the lack of viable alternative materials, the special requirements of some customer industries (particularly the automotive sector) that make it difficult for them to switch suppliers and the absence of considerable competitive constraining effects arising from imports, would allow Newco to act unilaterally in the market for galvanised steel. In turn, steel distribution constitutes a very important part of the global commercial policy of the major steel producers, which all have their owned integrated distribution networks. On the steel distribution markets, the Commission has taken the view that the merger would bring about competitive concerns in the following markets: (1) steel service centres in France; (2) steel service centres in Spain/Portugal; (3) stockholding of flat carbon steel products in France; and (4) oxycutting centres in France. In all these markets, Newco's strong position and its vertical integration would allow the merged company to unilaterally determine prices and control the different steel distribution sectors. In order to resolve the competition concerns identified by the Commission in the market for galvanised steel, the parties have undertaken to divest a number of steel production businesses: 6WUDVERXUJ and %HDXWRU in France, *DOPHG in Spain, 'XGHODQJH in , 6HJDO in , )LQDYHUGL in Italy and /XVRVLGHU in Portugal. These divestitures account for a production capacity of more than 1.7 million tonnes of galvanised products, representing about 6% of the market. A substantial proportion of the sales of the businesses to be divested are deliveries to the automotive industry, a sector particularly affected by the operation. The remedies also include the parties' commitment of supplying cold-rolled flat carbon steel (being the raw material for the production of galvanised steel) to the acquirers of the divested galvanising lines. With regard to the distribution markets, the parties undertake to divest &RIUDIHU, a steel service centre located in France, also active in stockholding and oxycutting operations in the French market, and %DPHVD, a steel service centre active in Spain and Portugal. These divestments will appreciably reduce Newco's share in the relevant markets and strengthen their purchaser’s ability to compete. The package of remedies fully eliminates the competition problems raised by the operation.

%DFNJURXQG France’s Usinor is one of the largest steel producers in the European Union and has operations in Belgium, , Italy, Spain and the USA. It manufactures, processes and distributes steel products, in particular, flat carbon steel products, stainless steel and other alloy steel products. Arbed, based in Luxembourg, is also a major European steel producer with important operations in Belgium, Germany, Italy, Spain and the USA. Its main activities are the production and distribution of steel products (including heavy and light long products, flat products and stainless steel products), the trade of scrap and the distribution of some raw materials for the steel industry (especially ferro-alloys and non-ferrous metal). Arbed has also certain other activities in the engineering sector. Aceralia is controlled by Arbed. It is the largest steel producer in Spain. It manufactures and distributes flat steel products, long steel products and processed steel products. It produces also certain types of small carbon welded tubes, products for the construction industry and carries out transformation activities.

2 NewCo Steel will be incorporated as a VRFLpWp DQRQ\PH under the laws of Luxembourg. NewCo will make an offer of its shares for the entire issued share capital of each of the parties. On the successful completion of the stock exchange operations, Aceralia's shareholders will hold approximately 20,1% of Newco, Arbed's will hold approximately 23,4% thereof and Usinor's shareholders will hold the remaining 56,5%. The deal was notified for clearance both under the ECSC Treaty (Treaty establishing the European Coal and Steel Community) and the EC Merger Regulation, since the parties produce products covered by the ECSC Treaty and products not falling under the jurisdiction of the said Treaty and therefore covered by the EC Treaty. The majority of the products for which the parties' activities overlap fall under the ECSC Treaty, in particular, hot rolled flat steel products, cold rolled flat steel, quarto plates, steel for packaging, galvanised steel, organic coated carbon steel, stainless steel, and the related distribution markets. Products falling under the EC-Merger regulation are construction sheet profiles, sandwich panels for the construction industry, tailored welded blanks and tubes. In relation to these latter, non-ECSC products, the Commission did not identify any serious competition concerns and therefore cleared the operation in Phase I on 19 July 2001.

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