India’s biggest steelmaker JSW Steel is expected to make a bid for ArcelorMittal’s Galati plant in Romania, three sources told Reuters, potentially competing against Ukraine’s Metinvest and Italy’s Marcegaglia.
ArcelorMittal, the world’s biggest steelmaker, has had to put six European assets up for sale to get approval from European competition authorities for its purchase of Italy’s giant Ilva plant.
Analysts’ view
Analysts at investment bank Jefferies estimate the combined value of the assets up for sale is $752-940 million and Galati, the country’s biggest steel plant employing about 5,600 people, is the largest of those assets.
Bank of America-Merrill Lynch is handling the sale, which it aims to complete by the end of 2018.
According to the European Commission, ArcelorMittal has agreed to provide an undisclosed amount of financing to the buyer of Galati to ensure that its steel output grows and the plant remains viable and competitive. ArcelorMittal declined to comment.
JSW, which wants to expand its steelmaking capacity outside India by 10 million tonnes per annum, also declined to comment.
Bidders line up
Industry sources had previously said that Marcegaglia and Metinvest were planning a joint bid for the plant but a Metinvest spokesman told Reuters the steelmaker would be bidding alone.
“We do not consider any partnerships or consortiums. Metinvest is a financially strong group (able) to participate on (a) standalone basis in the bid for any of the assets proposed by ArcelorMittal,” the Metinvest spokesman said. Marcegaglia did not respond to requests for comment. Galati has crude steelmaking capacity of 3.4 million tonnes per annum and rolling capacity of 6.2 million tonnes.
