WASHINGTON (AFX) - The Justice Department obtained agreement Friday from Inco Limited to sell a nickel refinery in Norway in order to gain antitrust approval of its $15 billion acquisition of Falconbridge Limited.
Inco and Falconbridge are by far the two largest manufacturers of high-purity nickel, which is used in super alloys to make safety-critical parts like the rotating components of jet engines.
The Justice Department asserted in a lawsuit that their merger would reduce the significant suppliers of high-purity nickel from three to two and substantially increase the likelihood that Inco would unilaterally increase the price of high-purity nickel to a significant number of customers.
Along with the lawsuit, the government filed an agreement with Inco that, upon court approval, will settle the suit.
Inco agreed to sell Falconbridge's Nikkelverk refinery in Kristiansand, Norway, and related nickel-marketing assets to LionOre Mining International Limited.
The department said that because LionOre is already involved in mining and processing nickel, the sale will enable it to become a fully integrated nickel producer and an important competitor in the high-purity nickel market.
Inco Limited, headquartered in Toronto, reported $4.7 billion in revenues in 2005. Its high-purity nickel sales in the United States are made through International Nickel Inc., a subsidiary of Inco Limited, headquartered tin Saddlebrook, N.J.
Falconbridge Limited, also headquartered in Toronto, is a worldwide mining company that reported revenues of $7.7 billion in 2005. Its high-purity nickel sales in the United States are made through Falconbridge U.S. Inc., a subsidiary located in Pittsburgh.
LionOre Mining International Limited, based in London, reported revenues of $417 million in 2005.
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