Italian Government Receives Two Offers for Europe's Largest Steel Works
03/08/2017 - Two consortiums have submitted binding offers for Italy’s ailing Ilva steel group and its Taranto steel works, Europe’s largest steel plant., according to reports
One of the consortiums is made up of ArcelorMittal and Italian steel processor Marcegaglia, along with, it now appears, Italian banking group Banca Intesa SanPaolo.
The other consortium is made up of Leonardo Del Vecchio, founder of the Luxottica eyewear group, Italy’s sovereign wealth fund, and Italian domestic steelmaker Arvedi. It also includes Indian steelmaker JSW Steel, which would have a 35 percent stake in Ilva, if the bid is successful.
Neither has disclosed the size of their bids, but ArcelorMittal, in an announcement confirming that it submitted an offer, said it intends to invest EUR 2.3 billion on top of the purchase price and would take finished steel production to 9.5 million metric tons annually.
Of the EUR2.3 billion capital investment, EUR1.1 billion would be put toward environmental projects; the remaining EUR1.2 billion would go toward asset revitalization, including deferred maintenance and a reline of the No. 5 blast furnace.
Additionally, the consortium would set up a new research and development center with an initial EUR10 million investment in Taranto.
“We are confident that we have the right industrial plan, the right environmental plan and the right commercial plan to support the transformation of Ilva into a company that will once again be a jewel of the Italian manufacturing landscape, adding value to the Italian economy and all stakeholders,” ArcelorMittal chairman and chief executive Lakshmi Mittal said in a statement.
Although the JSW consortium hasn’t disclosed details on its bid, but JSW founder Sajjan Jindal has said his goal would be to take annual production from 6 million metric tons to 10 to 12 million metric tons over the next three to five years, according to the (London) Financial Times.
Ilva has been under government administration in 2015. A decision on the bids is expected in about a month, according to the Reuters news service.
The other consortium is made up of Leonardo Del Vecchio, founder of the Luxottica eyewear group, Italy’s sovereign wealth fund, and Italian domestic steelmaker Arvedi. It also includes Indian steelmaker JSW Steel, which would have a 35 percent stake in Ilva, if the bid is successful.
Neither has disclosed the size of their bids, but ArcelorMittal, in an announcement confirming that it submitted an offer, said it intends to invest EUR 2.3 billion on top of the purchase price and would take finished steel production to 9.5 million metric tons annually.
Of the EUR2.3 billion capital investment, EUR1.1 billion would be put toward environmental projects; the remaining EUR1.2 billion would go toward asset revitalization, including deferred maintenance and a reline of the No. 5 blast furnace.
Additionally, the consortium would set up a new research and development center with an initial EUR10 million investment in Taranto.
“We are confident that we have the right industrial plan, the right environmental plan and the right commercial plan to support the transformation of Ilva into a company that will once again be a jewel of the Italian manufacturing landscape, adding value to the Italian economy and all stakeholders,” ArcelorMittal chairman and chief executive Lakshmi Mittal said in a statement.
Although the JSW consortium hasn’t disclosed details on its bid, but JSW founder Sajjan Jindal has said his goal would be to take annual production from 6 million metric tons to 10 to 12 million metric tons over the next three to five years, according to the (London) Financial Times.
Ilva has been under government administration in 2015. A decision on the bids is expected in about a month, according to the Reuters news service.
