ArcelorMittal updates bid for Essar Steel

Steelmaker submits bid for Essar Steel India Ltd. as part of joint venture with Nippon Steel & Sumitomo Metal.


Luxembourg-based ArcelorMittal and Japan-based Nippon Steel & Sumitomo Metal Corp. (NSSM) have announced that ArcelorMittal’s subsidiary ArcelorMittal India Private Ltd. (AMIPL) has submitted an offer in the rebidding process for Essar Steel India Limited.

The rebid offer has been made as part of a joint venture between ArcelorMittal and NSSMC to jointly acquire and manage Essar Steel. In mid-February 2018, ArcelorMittal submitted a bid on its own for the Essar Steel assets.

NSSMC currently has the capacity to produce approximately 50 million metric tons of crude steel per year, while ArcelorMittal currently produces more than 90 million metric tons of steel per year.

ArcelorMittal indicates that it and NSSMC “have enjoyed a close collaboration for many decades co-operating high-quality downstream finishing facilities in the United States.” In 2014, the two companies jointly acquired and have been operating AM/NS Calvert, which has steelmaking facilities in Alabama.

“The aim of the resolution process is to find a strong, new, capable owner for Essar Steel and maximize returns to creditors,” says Lakshmi Mittal, chairman and CEO ArcelorMittal. “We believe that ArcelorMittal, together with NSSMC, has the most relevant credentials and experience and is the most credible owner for Essar Steel given our decades of steel industry expertise, backed up by industry leading research and development and a wide range of innovative product capabilities.

“At the heart of this offer is a compelling industrial plan that enhances and transforms the asset,” he continues. “The plant in Hazira [India] is a big integrated steelmaking facility that requires dedicated knowledge and technological expertise to de-bottleneck, grow and enhance its product portfolio. We plan to commit significant capital expenditure to grow the asset, inject our proprietorial patents and processes and bring new high-quality products for industries such as automotive and solar to India.”

Kosei Shindo, president of NSSMC, adds, “Essar Steel is a good asset with a lot of potential, and I believe that NSSMC and ArcelorMittal could provide operational experience and access to the best of global technologies that will enable Essar Steel to reach its potential and greatly contribute to the turnaround of the Indian steel manufacturing sector.”

AMIPL submitted its first bid for Essar Steel in mid-February. In early March, ArcelorMittal announced it had signed a joint venture agreement with NSSMC that will allow the two companies co-own and co-manage Essar Steel if the bid is successful.

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