Bonn, Germany - Russian steel group Mechel is on the verge of taking over a German steel merchant, HBL Holding, financial-market sources confirmed to Deutsche Presse-Agentur dpa on Wednesday.

The Moscow newspaper Komersant had reported earlier that Mechel outbid the other potential buyers in an auction and had applied to Germany's competition authority, the Federal Cartel Office, in Bonn for merger permission.

HBL had sales of 130 million euros (187 million dollars) last year and has warehouses in eight German cities selling sheet steel and construction steel. Owning HBL would help Mechel increase its German sales.

The Cartel Office confirmed Mechel filed an application for permission to take over HBL shares several days ago. Based in the western city of Hamm, HBL has been in family ownership until now. (dpa)