Antitrust Body Blocks NLMK Buy

The Federal Anti-Monopoly Service said Friday that it would not to allow steelmaker Novolipetsk to increase its stake in an indebted peer to 100 percent, adding that it might fine Novolipetsk for its acquisition of the firm.

The service said Novolipetsk, the country's fourth-largest steelmaker, did not inform it before buying a controlling stake of 50 percent plus one share in Maxi Group in December.

"The deal was one of the biggest in ferrous metallurgy last year. ... Performing such big deals without the anti-monopoly service's approval is absolutely inadmissible," Alexei Ulyanov, head of the service's industry-monitoring unit, said in a statement.

"We are considering further actions toward the company, such as fines," he said

Novolipetsk, or NLMK, paid $600 million for the controlling stake in Maxi Group, which produces 2.4 million tons per year, but has said it could not refinance its debt of $1.8 billion due to the global liquidity crisis.

It said Friday that it would not contest any fines the service may impose.

In a similar case last year, Gazprom was ordered to pay $20,000 when it failed to get regulatory approval for the acquisition of a petrochemical firm.

NLMK also said it would refile its request to build a 100 percent stake in Maxi Group after formally informing the regulator that it already owns 50 percent plus one share.

NLMK, controlled by its billionaire Vladimir Lisin, produced 9.06 million tons of crude steel in 2007.