Benteler Group announced it was halting the sale of its steel tubing plant in Shreveport, La., to Luxembourg-based Tenaris because of improved market conditions, but the Department of Justice claims the decision follows its antitrust review of the deal.

“The abandonment comes after the Justice Department’s Antitrust Division raised competition concerns,” DOJ announced. 

The acquisition would have eliminated Benteler as an independent competitor and threatened higher prices, lower quality and less innovation in the market for seamless tubing and production casing, Jonathan Kanter, the assistant attorney general who heads up DOJ’s antitrust division, said on Monday.  

“I am grateful to the division’s hardworking staff who thoroughly investigated the transaction on behalf of the public,” he said.

Improved conditions 

Based on Benteler’s announcement, the decision was economic and strategic: oil and gas markets have improved since the deal was announced last summer. 

“The future market perspective by far exceeds previous expectations,” the company said on Monday. “Therefore, the Benteler Group has exercised its contractually agreed right to terminate the envisaged sale.”

Benteler, whose parent company is based in Salzberg, Germany, said the fair value it assigns to the plant has risen to be “significantly higher than the purchase price” of $460 million that it had agreed to with Tenaris last year. 

Tenaris had agreed to buy the plant on a cash-free, debt-free basis to expand its production range and manufacturing presence in the United States. The facility was built in 2013 and, since its ramp-up, has begun producing 400,000 metric tons of seamless steel tubing a year. 

A spokesperson from Benteler Group in Salzberg told Legal Dive its decision about the sale was independent of the antitrust review and that it wasn’t expecting the results of the review until March. 

Antitrust push

The Biden administration has had mixed success with its aggressive antitrust enforcement posture, notching some wins but also losing some high-profile battles, including last week, when a federal judge allowed Meta’s acquisition of fitness app maker Within Unlimited to go forward against the wishes of the Federal Trade Commission.

The FTC said the deal would create too much concentration in the growing virtual reality fitness niche, but the judge said the agency failed to show Meta posed a competitive threat to the market. 

On the win side, DOJ’s antitrust team late last year stopped the merger between two of the largest book publishing companies in the U.S. on labor-market grounds.

As part of its antitrust push, the Biden administration, in addition to consumer and labor-market impacts, is also scrutinizing deals based on data concentration and what it calls interlocking directorates, which refers to companies that share one or more board members. 

The administration has also lowered the Hart-Scott-Rodino (HSR) threshold, under which companies are subject to automatic antitrust review, to deal sizes of $101 million, and hiked the fee companies pay for HSR review. In some cases, the fee could go up by as much as 700%. 

A Dechert review released last month showed the Biden administration filed lawsuits to block 10 deals last year, the most since the law firm started tracking the space in 2011. 

“What we’re seeing now is that there are fewer merger cases being settled and far more instances where the agencies are seeking to block the merger,” James Fishkin, an antitrust partner at Dechert, said.

In the case of Benteler, the company’s decision preempts any move DOJ would have taken to block the deal.