(BRUSSELS) - The European Commission on Thursday approved a proposed joint venture between ArcelorMittal, the world's largest steel producer, and Sweden's BE Sverige group.

The EU's top watchdog approved the plan to combine the steel service centre activities of the two groups in Sweden after an investigation found that the deal "would not impede effective competition in the European Economic Area."

The joint venture will only be active in the distribution of flat carbon steel and will be jointly controlled by the Luxembourg-based ArcelorMittal and BE.

The European Commission said the predicted market share of the joint venture measured in volume would remain below 15 percent. In addition the venture would face competition from several "major players" including Dickson/Tibnor and Norsk Stal.

ArcelorMittal said last month that the deal would create the third largest player in the market, with sales of more than 80 million euros (127 million dollars) per year.

Text and Picture Copyright 2008 AFP. All other Copyright 2008 EUbusiness Ltd. All rights reserved. This material is intended solely for personal use. Any other reproduction, publication or redistribution of this material without the written agreement of the copyright owner is strictly forbidden and any breach of copyright will be considered actionable.