Cade, the Brazilian antitrust regulation agency, has approved with restrictions the acquisition of steelmaker Votorantim Siderurgia (VSA) by ArcelorMittal, said a report.

The deal will boost ArcelorMittal Brazil's crude steel production to 5.6 million tonnes per year (tpy) and rolled steel capacity to 5.4 million tpy, added the S&P Global Platts report.

The acquisition will enable ArcelorMittal to become the largest long steel producer in Brazil, Jefferson De Paula, ArcelorMittal’s president for Central and South American longs operations, was quoted as saying in the report.

He added that the company is going to be the country's leader in the long steel segment; the major supplier to the construction sector - which will have a high growth potential.

In the deal signed with Cade, the companies agreed to divest two sets of assets. The first relates to the production of common long rolled products and drawn bars. The second package is related to the wire drawing and wire rod market.

Each set must be sold to a single and distinct buyer, neither of whom can have any relation to the companies involved in the transaction or their affiliates, the regulator said.