Steel giant ArcelorMittal favourite to acquire ThyssenKrupps Alabama plant

Luxembourg-based steel and mining group ArcelorMittal (AMS:MT) is one of the two top bidders for German steelmaker ThyssenKrupp AG’s (ETR:TKA) steel business in the Americas, offering USD1.5bn (EUR1.1bn) for the company’s Alabama plant, according to a report by the Wall Street Journal.

Companhia Siderurgica Nacional (NYSE:SID), or CSN, is the other leading competitor with an offer of USD3.8bn for the Alabama plant and a stake in ThyssenKrupp’s mill in Brazil, but sources cited by the paper said CSN has less balance sheet flexibility and lacks supply of high-quality slabs and that limits the chances of its bid.

ThyssenKrupp expects binding offers by mid-February, with a decision regarding a buyer to be made this fiscal year to end September 2013. The Americas operations were offered for sale in 2012, with their parent targeting a price equal to their book value of USD8.86bn, it has said.

ArcelorMittal confirmed last week it had made an offer for the Alabama plant, which its CFO Aditya Mittal described as a world-class quality asset, the Wall Street Journal said. The Luxembourg steel group also said last week it had raised USD4bn from issuing stock and bonds.

This plant has some 1,500 employees, while the one in Brazil employs 3,500.

The German group announced last year plans to sell these operations or seeking partnerships with the view of putting an end to losses at the mills and focusing on its business in Europe.
It had also received offers from other suitors, but these are not seen as strong rivals to ArcelorMittal and CSN due to their weaker financial position, the Wall Street Journal said.

Germany’s ThyssenKrupp in talks to sell blanks unit to China’s Wuhan Iron

German steel group ThyssenKrupp AG (ETR:TKA) is nearing an agreement on the sale of its Tailored Blanks business to Chinese iron and steel products maker Wuhan Iron and Steel Co Ltd (SHA:600005), according to sources cited by the Financial Times Deutschland.

ThyssenKrupp, which is undergoing a restructuring aimed at reducing debt, said on 10 August it was in advanced negotiations to dispose of the unit. The group’s chief financial officer Guido Kerkhoff told analysts then that it would not take long until an agreement was reached.

ThyssenKrupp Tailored Blanks makes laser-welded blanks for the car sector. Based in Germany, the division has a global network of 13 plants in seven countries.

With a 41% share of the global sector market, ThyssenKrupp Tailored Blanks generates annual revenues of EUR700m (USD878m) and has 900 employees, Reuters said.

ThyssenKrupp plans to sell non-core operations with combined revenues of EUR10bn.
The group has recently signed an agreement to dispose of ThyssenKrupp Steel Europe AG’s Construction Group to Irish Kingspan Group plc (LON:KGP) as part of efforts to optimise its portfolio, it has said.

In line with the same efforts, the steel giant is also looking into the possibility of selling Berco, its Italian supplier of undercarriages for construction equipment, it said.

Its strategic development programme advanced in the third quarter, with 90% of its planned disposals being completed or signed by the end of that period, ThyssenKrupp said.

The company is present in some 80 countries globally, employing a workforce of 170,000 worldwide.