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EU clears Umicore and Zinifex

to combine zinc units, forming largest zinc producer

EU regulators on Tuesday cleared Belgium's Umicore SA and Australia's Zinifex Ltd. to combine their zinc smelting and alloying operations in a deal that will create the world's largest producer of the metal.

The European Commission said this would not significantly impede competition in Europe, even though the new company — Neptune — would create a number of overlaps where the two are now rivals and would also affect the supply chain.

But it said world zinc markets would remain "sufficiently fragmented" with a number of rivals able to up the pressure on the new company if it tried to break antitrust rules.

"The commission found no indications that the proposed transaction might create or favor the conditions for coordinated behaviors," it said.

For the supply chain, Neptune will provide zinc that Umicore will use but regulators said they would not be in a position to close off supply as there were plenty of alternative suppliers for zinc customers.

The companies have not given financial details of the deal but have said they will sell shares in Neptune in an initial public offering some time in the future.

The two businesses will combined produce some 1.2 million metric tons (1.32 million tons) of zinc and zinc alloys a year and will have a work force of about 4,500 people. 

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