ArcelorMittal has asked Italy’s state lender Cassa Depositi e Prestiti (CDP) to back its bid for the troubled Ilva steel plant as it fights competition from two other bidders, according to an interview published in Il Sole 24 on Friday. On Tuesday the Italian government extended to June 30 the deadline for presentation of binding offers for Europe’s largest steel plant by output capacity and said it would take four months to assess environmental aspects of the bids.
The government took over administration of the loss-making business last year to try to save some 16,000 jobs and clean up its polluting factories in the southern Italian city of Taranto. The head of mergers and acquisitions at ArcellorMittal, the world’s top steel producer, described the acquisition of Ilva as “strategic” in the interview.
Ondra Otradovec told the newspaper that ArcellorMittal would bid for Ilva in partnership with Italian group Marcegaglia, confirming remarks made this week by Marcegaglia’s chief executive. Otradovec said ArcelorMittal would take 85 percent of Ilva and Marcegaglia 15 percent, if the CDP did not join in.
However, ArcelorMittal will have to beat off competition from unlisted Italian steelmaker Arvedi and Turkish rival Erdemir. In the last few days CDP, which has publicly expressed an interest in acquiring a minority stake in Ilva, has met representatives of both Arvedi and Edemir, a source with knowledge of the matter told Reuters.
CDP declined to comment on that meeting. Ilva has set up favourable conditions to attract bidders, laying off 4,000 staff, and obtaining a 1.1 billion euro ($1.23 billion) bridge loan to finance an environmental clean-up. The plant was put under court administration in 2013 after magistrates seized 8.1 billion euros of assets belonging to the former owners, the Riva family, amid allegations that toxic emissions were causing abnormally high rates of cancer.