ArcelorMittal closes Ilva deal and renames it AM Italia

ArcelorMittal has completed the acquisition of Italy’s largest steelmaker Ilva, effective November 1, it said in a statement Thursday.

Ilva was purchased by a consortium called AM Investco, in which ArcelorMittal has a majority 94.4% stake while Banca Intesa Sanpaolo owns the remaining 5.6%.

Following completion of the transaction, ArcelorMittal has assumed full management control of Ilva, which will form a new business cluster within ArcelorMittal Europe-Flat Products and will be known as ArcelorMittal Italia.

The new owner is now set to launch a Eur2.4 billion investment program, including a Eur1.15 billion environmental investment plan. In addition, the industrial investment plan, including the reline of BF No. 5, will increase crude steel production to 8 million mt/year, ArcelorMittal said.

“Closing the acquisition of Ilva is an important strategic step for ArcelorMittal,” chairman and CEO Lakshmi Mittal said in the statement. “We have a strong history of rehabilitating under-performing assets. “I am confident that we will prove successful in restoring Ilva’s operational, financial and environmental performance and, in doing so, create value for our company, Ilva’s stakeholders and the Italian economy.”

As per the deal terms ArcelorMittal will be leasing Ilva for a minimum of four-five years, with the annual leasing charge of Eur180 million, effectively a down payment against the acquisition price of Eur1.8 billion. It should also be noted that the acquisition price includes Eur1 billion of net working capital.

ArcelorMittal is continuing negotiations with buyers regarding the sale of the other assets – ArcelorMittal Dudelange in Luxembourg, and several finishing lines in Liege, Belgium – included in the divestment package proposed to meet the EU antitrust requirements for the Ilva deal. The company has already secured a binding offer for four European facilities (Ostrava, Galati, Skopje and Piombino).

Wojtek Laskowski, S&P Global PLATTS