ArcelorMittal India Private Limited (AMIPL) – a subsidiary of ArcelorMittal, the world’s largest steel company – has submitted an offer for Essar Steel India (‘Essar’), an Indian steel company.
In its offer, AMIPL set out a detailed industrial plan for Essar aimed at improving performance and profitability and ensuring it can participate in the anticipated growth of steel demand in India. The offer also highlights the ArcelorMittal group’s ‘extensive experience and track record… in the successful acquisition and integration of under-performing assets, which AMIPL believes would be of considerable value to Essar’. Through acquisition, the company would also have access to the deep bench of technical expertise and knowledge from across the group, which, claims ArcelorMittal, is unparalleled in the steel industry.
Lakshmi Mittal, chairman and CEO of ArcelorMittal, commented: “The offer submitted today by AMIPL includes a detailed investment plan to address operational issues in Essar’s existing asset base. With our industry expertise and renowned operating prowess, we believe we are uniquely equipped to implement a successful turnaround which would be beneficial to Essar’s stakeholders.”
According to Aditya Mittal, group CFO and CEO of ArcelorMittal Europe, the acquisition ‘aligns with the group’s strategy of selectively investing in attractive projects to maximise long-term shareholder value’. He said that India is expected to be the world’s fastest growing economy over the next decade and as the economy grows its steel intensity will also increase. “We believe our technical experience and management know-how, gained from many successful acquisitions and integrations, will ensure success for the various steel and pelletising operations at Essar,” he added.
Essar Steel is an integrated flat steel producer with its main production facility in Gujarat. It has a nameplate crude steel capacity of 9.6Mt/yr, although the current maximum achievable crude steel production level is 6.1Mt/yr due to a bottleneck in the steelmaking and casting process, it is claimed.