American Iron and Metal Inc’s (AIM’s) acquisition of rival shredder Total Metal Recovery (TMR) is being investigated by Canada’s Competition Bureau.
The bureau is concerned about the transaction leading to lessening or prevention of competition in the scrap metal business in Quebec, where facilities of both the companies are located. However, AIM has countered that the transaction should be closed immediately since TMR, which is in serious financial trouble has already significantly reduced operations.
As part of the review, the bureau has reached an agreement with AIM that prevents the scrap metal company from selling TMR’s assets while the transaction is under investigation. The agreement, which is registered with the Competition Tribunal requires AIM to preserve TMR’s assets for 60 days and maintain their viability and marketability throughout this period. The 60-day preservation period will begin upon the close of the transaction.
A statement by the bureau announced that if its investigation concluded that the acquisition was likely to result in a “substantial lessening and prevention of competition,” the bureau could seek the sale of TMR’s assets in Montreal to another suitable purchaser as an “appropriate remedy.”
AIM and TMR own and operate facilities that process ferrous and non-ferrous scrap metals, including large shredders and related assets in Laval, Quebec. According to the bureau, the agreement, has the effect of a court order pursuant to sections 100 and 105 of the Competition Act.