Steel manufacturer BlueScope has been given the all clear to go ahead with a deal which will see it purchase a key manufacturer of steel roofing and flooring products.

On Thursday, the Australian Competition and Consumer Commission (ACCC) said it will not oppose BlueScope’s proposed acquisition of Fielders Australia from Hills Holdings.

The acquisition is part of an $87.5 million deal announced last August which will also see BlueScope buy Hills’ Orrcon pipe and tube manufacturing and distribution business.

In a statement, the ACCC acknowledged BlueScope was the only domestic manufacturer of a number of types of steel coil which are the key inputs in the roll formed product manufacturing process, and that its COLORBOND painted steel brand enjoys a high level of market recognition especially in residential applications such as roofing.

But it said a combination of factors including the need to operate the blast furnace at its Port Kembla steelworks at full capacity along with the greater profits it earns on domestic sales over exporting excess production meant BlueScope had a strong incentive to maintain competitive supply to rival roll formers.

In any rate, the proposed acquisition would not substantially increase the company’s market power in this area, the ACCC said.

Moreover, whilst the proposed acquisition represents a merger of two key suppliers in relation to steel formwork, the ACCC says customers in this segment would continue to have adequate options with regard to alternative suppliers whilst BlueScope would also be constrained by the prospect of new market entrants and substitution of steel formwork in favour of timber formwork.

“The ACCC concluded that the acquisition would be unlikely to substantially lessen competition in any relevant market” ACCC Chairman Rod Sims said.

Started in 1900, Fielders specialises in the manufacturer of steel and roofing products and has an offering ranging from roofing and cladding in a range of profiles and gauges, fencing systems, rainwater goods, gutters, flashings, sheet metal fabrication, fascia, purlins, doorframes, KingFlor structural decking and Centenary carports and verandas.

Following earlier ACCC approval with regard to the Orrcon purchase in December, BlueScope now has the required approvals to proceed with the entire transaction referred to above.

When announcing the acquisitions last August, BlueScope Managing Director and Chief Executive Officer Paul O’Malley said both Fielders and Orrcon operated in business lines which fit well with the company’s core Australian operations and integration of the businesses into existing operations would help drive greater efficiencies and reduced costs through greater economies of scale.