Steelmakers formalize offers for Hayange and Ascoval

Steelmaker ArcelorMittal, Italian long products maker Beltrame and German steelmaker Saarstahl have now all submitted bids to purchase French steelmakers Hayange and Ascoval, put on the market by the troubled Liberty Steel Group, the bidders have confirmed. The deadline to present offers to purchase Liberty’s French units has been reported to be June 15, sources told S&P Global Platts June 16.

Liberty put specialty steelmaker Ascoval and rail producer Hayange on the market together in May amid the metal group’s ongoing financial troubles after its main financier, Greensill Capital, filed for bankruptcy in March. The French government that month loaned Eur20 million ($24.2 million) to the two plants to cover working capital and capital expenditure costs, according to sources. The French government obliged Liberty to refinance operations by the end of May with an additional Eur20 million, or put the two companies up for sale if it could not, sources have said.

Of other steelmakers understood to have shown interest in Hayange and Ascoval, Acciairie Venete declined to comment and JSW did not answer Platts’ requests for comment. Sources said JSW is unlikely to have formalized an offer while Acciairie Venete may have bid for the two French mills.

German long products maker Saarstahl released an official statement June 16 confirming its offer. “This bid supports an industrial project for the future of the two plants, but also for an enduring development of industrial activities in the Nord and Moselle regions,” said Karl-Ulrich Kohler, chairman of Saarstahl’s management board. “In the face of international competition in the steel market, Saarstahl is offering a permanent acquisition of the Ascoval and Hayange plants based on a strong geographical and industrial integration of Hayange and Ascoval into the production network of the current plants of the group.”

Saarstahl’s project would aim to integrate a new rail market into Saarstahl’s commercial and industrial strategy, to diversify its portfolio, adding blooms and rails and to access electric arc furnace technology. “This project is fully aligned with the strategy of our Saarland Group, both in terms of strengthening competitiveness and structural transformation,” said Kohler.

The company has a continuously casting blooming line in Volklingen which could supply Hayange with some blooms in particular sizes that Ascoval doesn’t supply and which are currently supplied by British Steel, market sources told Platts.

Sources said there are however growing expectations that ArcelorMittal could win the bid as it is probably in a position to offer more for the two companies in terms of financial capacity and industrial plans, although there is the caveat that such a deal might not go ahead for competition reasons as the European Commission may consider ArcelorMittal’s existing strength in the rail market.

ArcelorMittal’s assets in the steel rail sector in Europe includes one plant in Spain, one in Luxembourg and two in Poland, which supply key rail markets including high-speed, metro, heavy-haul, urban transport and port operations. Sources said the company is checking if this might pose a problem in terms of already having a dominant market position within the EU. According to a Reuters report, EU antitrust regulators will decide by July 9 whether to clear ArcelorMittal’s bid for Hayange and Ascoval.

ArcelorMittal declined to comment on antitrust issues when approached by Platts, but it confirmed that it had submitted an offer to acquire the Hayange and Ascoval steel plants: “The Hayange and Ascoval plants would benefit from ArcelorMittal’s significant R&D capabilities in products and processes, particularly in the rail business, market knowledge and sales footprint, investment and business development capacity, logistics and storage capabilities. ArcelorMittal would also commit to maintaining employment at existing levels and would leverage its know-how and experience in HR development.”

ArcelorMittal produced approximately 8 million mt of steel in France last year, employing 15,500 people.

Italy-based longs producer Beltrame confirmed its interest. The company already has mills in France with LME (Lamines Marchands Europeens), located not far from Ascoval and has a mill in Romania that could benefit from Ascoval blooms, a company executive told to Platts. Beltrame’s Donalam mill in Romania is a new customer for Ascoval, which shipped 500 mt of blooms as a trial last month, sources told Platts.

None of the companies cited above said how much they had offered for the French companies, or other details.

Acciaierie Venete makes quality long steel products and is owned by the family of the head of the Italian Steel Association, Federacciai, Alessandro Banzato, who was always keen to expand his family business overseas but up until now had not done this, industry sources said. Market sources said that Acciaierie Venete is very solid, has cash and is very keen to increase its production mix so “it could be the right time for them to shop abroad.”

JSW Group produces blooms for rails in India and also produces rails at its steel plant in Italy in Piombino. Union sources indicated however that JSW has slowed down its investment in its Italian mill, which is largely at a halt.

— Annalisa Villa