Tags: ArcelorMittal | Nippon | Steel | Deal

ArcelorMittal-Nippon Steel Near $1.5 Billion US Deal

Tuesday, 26 Nov 2013 05:53 PM

ArcelorMittal and Nippon Steel & Sumitomo Metal Corp., the two largest steelmakers by market value, are nearing agreement to buy ThyssenKrupp AG’s Alabama plant for about $1.5 billion, according to two people familiar with the situation.

An announcement could come as early as this week, said the people, who asked not to be identified because the accord hasn’t been made public. As part of the deal, the buyers agreed to take steel from ThyssenKrupp’s CSA plant in Brazil for processing at the U.S. site, one of the people said.

Robin Zimmerman, a spokesman for Essen, Germany-based ThyssenKrupp, declined to comment on the deal and referred to a Nov. 19 statement in which the company said it was in exclusive talks for the potential sale of the Alabama plant. A spokeswoman for Luxembourg-based ArcelorMittal declined to comment. Nozomu Takahashi, a Nippon Steel spokesman, couldn’t be reached for comment outside normal Japanese business hours.

ThyssenKrupp, Germany’s largest steelmaker, has spent the past 18 months trying to offload its Steel Americas segment, which includes both the Alabama and Brazilian operations. The company has spent almost 12 billion euros ($16.3 billion) on the plants. After a number of writedowns following a slump in steel prices, the Americas unit has a book value of 3.4 billion euros. The Alabama sale was reported earlier by Nikkei.

Chief Executive Officer Heinrich Hiesinger also sought to sell the unit as part of a strategy of diversifying away from steel. He plans to build up operations from elevators to auto parts and marine services.

Americas Losses

The company controls 73 percent of the CSA steel plant in the state of Rio de Janeiro. Vale SA, the largest iron-ore producer and a supplier to the plant, owns the rest.

ThyssenKrupp, with a market value of 9.7 billion euros ($13 billion), built CSA, which has a capacity of 5 million metric tons a year, to supply steel slabs to its U.S. and German mills. Nippon Steel has a market value of $31 billion and ArcelorMittal is worth $27.7 billion.

Steel Americas reported an adjusted loss before interest and taxes of 261 million euros in the nine months through June 30, compared with 778 million euros a year earlier.

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ArcelorMittal and Nippon Steel & Sumitomo Metal Corp., the two largest steelmakers by market value, are nearing agreement to buy ThyssenKrupp AG's Alabama plant for about $1.5 billion, two people familiar with the situation told Bloomberg.
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Tuesday, 26 Nov 2013 05:53 PM
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