Three leading Australian steel companies on Tuesday ended a spat over a planned domestic merger which BlueScope Steel, the nation’s largest steelmaker, had threatened to derail.

OneSteel, the second-largest steelmaker, will go ahead with a A$1.9bn ($1.5bn) offer for Smorgon Steel after BlueScope, a minority investor in Smorgon, agreed to end its opposition to the deal. In return, BlueScope will be able to acquire the steel distribution subsidiary of Smorgon for A$700m.