Yahoo Finance ArcelorMittal Inks Deal With Liberty House to Divest Assets
ArcelorMittal MT recently declared that it has obtained a binding offer from Liberty House Group for the buyout of ArcelorMittal Piombino (Italy), ArcelorMittal Galati (Romania), ArcelorMittal Ostrava (Czech Republic) and ArcelorMittal Skopje (Macedonia). Notably, these assets are part of a divestment package, which the company agreed with the European Commission during the investigation of merger control into the planned acquisition of Ilva S.p.A (“Ilva”).
The closure of the transaction is subject to the completion of the Ilva buyout by the company, the conclusion of information consultations with local and European Works Councils along with conditional approval by the European Commission. Moreover, ArcelorMittal is negotiating with parties regarding the sale of other assets — ArcelorMittal Dudelange (Luxembourg) and several finishing lines in Liege, Belgium — which are also included in the divestment package.
In June 2017, ArcelorMittal and its partner Marcegaglia announced that AM Investco has inked a binding agreement with the Italian government regarding the lease and obligation to purchase Ilva. The transaction details of AM Investco’s plans for Ilva include a purchase price of €1.8 billion with annual leasing costs of €180 million, which will be paid in quarterly installments.
ArcelorMittal believes that the acquisition of Ilva will be an appropriate investment, without compromising on the strength of balance sheet. This will provide an opportunity to expand leadership and product offering in Italy, the second-largest steel producing and consuming market in Europe.
ArcelorMittal, which is one of the leading steel producers along with Nucor Corporation NUE, United States Steel Corporation X and Steel Dynamics, Inc STLD, stated during second quarter earnings call that market conditions are favorable and demand environment continues to be positive along with healthy steel spreads. The company expects global apparent steel consumption to grow in the range of 2-3% in 2018, up from the previous expectation of 1.5-2.5%.
In the United States, the company projects apparent steel consumption growth of 2-3% in 2018 (up from 1.5-2.5% expected earlier), considering higher construction and machinery demand. It also anticipates 2-3% growth in apparent steel consumption in Europe, up from 1-2% expected earlier, supported by strength across construction and machinery end-use markets.
Apparent steel consumption is likely to rise 5.5-6.5% in Brazil compared with the earlier expectation of 6.5%-7.5% to highlight the impacts of the nationwide truck strike and cautious outlook ahead of the elections.
Moreover, apparent steel consumption in China is expected to increase 1-2% (up from -0.5% to 0.5%) in 2018, driven by consistent improvement in real estate demand, ongoing strong machinery and automotive demand, partly offset by slowdown in infrastructure.
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