The world’s largest steelmaker ArcelorMittal and Marcegaglia, an Italian steel processor with global reach, have offered to buy the Ilva steel plant for EUR 1.6 billion (US$1.72 billion) trouncing a EUR 1.2 billion bid from AcciaItalia.

AcciaItalia comprises Indian steelmaker JSW, Italian steelmaker Arvedi, Italy state holding company CDP and Leonardo Del Vecchio’s Delfin business.

Taranto-based Ilva was taken over by the Italian government in 2015 and sequestered by magistrates three years earlier for causing environmental and health problems. It has long been a thorn in the side of the Italian steel industry.

Despite having a production capacity of 11Mt, last year Ilva produced 5.8Mt.

Both consortiums involved in the bid have similar investment plans for the Ilva plant that involve upping output and cleaning up the operation.

ArcelorMittal-Marcegaglia intends to invest EUR 2.3 billion while rival bidder AcciaItalia is planning a EUR 3 billion investment.

Italian state commissioners have until 6 April to ‘pick a winner’ and their decision would need to be ratified by Italy’s Industry Ministry, it is claimed.

Where anti-trust issues are concerned, the AcciaItalia consortium seems likely to have a clear run due to JSW having very few steel assets in Europe. Conversely, ArcelorMittal-Marcegaglia might have a case to answer because of the former’s resulting 40% share in the European flat steel market, which current sits at 33%.

Source: Engineering News