Luxembourg-based ArcelorMittal, the world’s largest steel producer, and Italy-based steelmaker Marcegaglia have announced an offer to acquire Milan, Italy-based steel producer Gruppo Ilva.
ArcelorMittal and Marcegaglia, in a news release issued by ArcelorMittal in late June 2016, say their offer includes aspects designed to appeal to Ilva and its shareholders, including:
- a commitment to improving Ilva’s environmental performance, bringing Ilva in-line with European environmental standards and legislation;
- the intention to increase Ilva’s capacity rate, with crude steel production rising from the current level of about 4.8 million tonnes per year to more than 6 million tonnes per by 2020, and to maintain the operation of a minimum of three blast furnaces;
- a capital expenditure programme designed to enhance Ilva’s asset capabilities, increasing productivity levels and improving health and safety performance;
- the introduction on more value-added steel products in Ilva’s product mix;
- economies of scale from which Ilva would benefit by being a part of ArcelorMittal.
The submission of the bid is the first step in what ArcelorMittal calls “a multi-stage process that will see only the environmental part of the offer discussed for the next 120 days.”
Says Geert Van Poelvoorde, executive vice president and CEO of ArcelorMittal Europe Flat Products, “ArcelorMittal, together with our partner Marcegaglia, has today submitted our offer for Ilva. We believe Ilva represents a compelling investment opportunity for ArcelorMittal, without compromising our balance sheet strength, as it would extend our leadership position and increase our product offering in Italy, Europe’s second largest steel manufacturing and consuming market.”
Adds Antonio Marcegaglia, chairman and CEO of Marcegaglia, “Ilva has always been a vital asset in the entire Italian steel chain, and we need to ensure it can continue to be in the long term.”
In 2015, ArcelorMittal had revenue of $63.6 billion and crude steel production of 92.5 million tonnes, while its iron ore production level reached 62.8 million tonnes.
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