Merrill Lynch and Morgan Stanley are paving the way for European Commission approval of Usinor, Arbed and Aceralia Corporacion Siderurgica, a three-way steel merger, but bankers are wary after a spate of vetoes on deals.

In June this year the boards of Usinor, Arbed and Aceralia signed a definitive merger agreement, four months after the three steel companies announced their intention to merge. Merrill is advising Usinor, the French steel gaint and largest shareholder of the new group. Morgan Stanley is joint financial adviser to both Arbed, the Luxembourg listed steel company and Aceralia, the Spanish company, who together will own less than 50% of the merged group.