The EU has initiated an in-depth Phase II merger investigation into the $500m (3.56bn yuan) acquisition of Anglo American’s Brazilian nickel business by Chinese-owned MMG, citing concerns that the deal could impact the EU’s stainless steel industry.

The obligations of MMG and Anglo American to complete the acquisition are subject to the satisfaction or waiver of several conditions precedent, MMG stated.

These conditions include merger control clearance in multiple jurisdictions, acceptance of a filing with the National Development and Reform Commission (NDRC), the People’s Republic of China (PRC), and acceptance of a filing with the Ministry of Commerce, PRC (MOFCOM).

Although all other conditions have been met, the EU has opted to proceed with a Phase II review.

The Phase II process involves a thorough examination by the European Commission to determine whether there are substantive anti-competitive concerns associated with the acquisition.

EU competition chief Teresa Ribera stated that watchdogs will investigate whether the deal “could jeopardise continued and reliable access in Europe” to ferro-nickel supply, reported Bloomberg.

As part of the process, MMG and Anglo American will be required to propose measures to address the regulators’ concerns or face the risk of the deal being blocked.

The European Commission has set 20 March as the deadline to reach a final decision.

The two companies stated that they don’t believe the deal will raise competition issues and will work with the EU watchdogs to comprehensively address any remaining questions.

MMG is a Hong Kong-listed company but is majority owned by China Minmetals, the state-owned mining and trading enterprise.

Beyond the EU, the deal has faced criticism from the American Iron and Steel Institute, which has urged the White House to intervene, arguing that the transaction could expand China’s control over global nickel reserves, reported the media outlet.

The companies had reportedly previously attempted to avoid a comprehensive EU investigation by proposing that Anglo would buy ferro-nickel from MMG’s Codemin and Barro Alto mines in Brazil. However, regulators concluded that this measure was inadequate.

A Phase II EU probe generally adds 90 working days to the timeline, but the process can take longer if regulators request additional information.

"EU initiates Phase II investigation into MMG-Anglo nickel deal " was originally created and published by Mining Technology, a GlobalData owned brand.

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