Steel Mills
ArcelorMittal Submits Bid for Ilva Steel
Written by Sandy Williams
November 28, 2014
ArcelorMittal and Italian steel processor Marcegaglia have submitted a non-binding, 30-day deadline offer for troubled Italian steel plant Ilva.
Ilva, a privately owned company by Riva Steel, has been under special administration since last year after a court order temporarily shut down a portion of the plant for environmental violations. Toxic factory emissions were found to contribute to a high mortality rate from cancer and respiratory disease in the Taranto region.
Parent company Riva Steel was forced to cease operations of all of its plants in Italy, except Ilva, after Italian police seized almost €1 billion assets of the group in September, 2013. The seizure was ordered during an investigation of Ilva management for criminal activity associated with environmental disasters at the mill.
The plant has a production capacity of 11 million tonnes but produced only about half that (5.7 million tonnes) in 2013. The company has a net debt of roughly $2.5 billion and will require an estimated investment of $2.24 billion to bring the plant into environmental compliance.
ArcelorMittal CEO Lakshmi Mittal indicated continued interest in the mill during the third quarter earnings conference. Purchase price in the bid offers from ArcelorMittal and Marcegaglia, and rival bidder Italian steel producer Arvedi, were not disclosed. JP Morgan estimated in October that ArcelorMittal could spend as much as $500 million for a 70 percent stake in Ilva.
“We (have) submitted a non-binding offer to acquire all of Ilva’s operations. We look forward to continuing discussions with Commissioner Gnudi concerning our offer,” an ArcelorMittal spokeswoman said.
Ilva employs 16,000 workers at the plant.
Sandy Williams
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