ArcelorMittal sells stake in engineering group Paul Wurth for €300m

Luxembourg-based steel and mining group ArcelorMittal SA (AMS:MT) said today it is offloading its holding in local engineering group Paul Wurth within its plan to dispose of non-strategic assets.

The 48.1% stake will be bought by German equipment manufacturer SMS GmbH for EUR300m (USD362m). The transaction is seen to close in the current quarter of the year, pending standard closing conditions.

The sale will have slight impact on ArcelorMittal’s net debt as the cash proceeds will be counterbalanced by the deconsolidation of Paul Wurth’s cash balance, the vendor noted.

According to Michel Wurth, chairman of Paul Wurth and member of ArcelorMittal’s board, the sale will ensure new growth opportunities for SMS and further reinforce its technical capacity and services. The deal will also solidify both companies’ leading positions in the metallurgical equipment and process market segment, he said.

Paul Wurth engages in the design, manufacture and supply of plants, systems, processes and mechanical equipment primarily for the iron and steel and non-ferrous metals industries in Europe, the Americas, Asia and Africa. The company, which has a headcount of 1,600, booked a net profit of EUR18.2m last year, while its turnover totalled EUR491m.

SMS provides plant and machinery construction services for the steel and nonferrous metal industry. The group’s sales stood at some EUR3bn in 2011.

ArcelorMittal, which posted today a 28% annual decline in earnings before interest, tax, depreciation and amortisation (EBITDA) to USD2.4bn (EUR2bn) for the second quarter of 2012, said it expected to make further disposals in the coming quarters in a drive to cut debt.