Spanish long products producers Gallardo and Megasa are interested in buying German steelmaker Stahlwerk Thüringen (SWT), owned by Brazilian mill Companhia Siderúrgica Nacional (CSN), a source close to the deal told S&P Global Platts Thursday
Megasa and Gallardo are reported each to have submitted an offer in the range of Eur300-350 million for the sections producer.
Two weeks ago CSN President Benjamin Steinbruch said the sale of SWT was very close to being announced. But this is not the first time that a similar announcement has been made.
The decision to sell the German unit was taken to help reduce CSN’s debt of about Real 25 billion ($6.5 billion). In order to achieve the debt reduction the company has also been looking into divesting its shares in steelmaker Usiminas and seeking mine streaming contracts to raise cash.
“Steinbruch’s target price for SWT is around Eur400-450 million — higher than what’s been offered — so we have to see if it will accept one of the two,” the source said.
All of Megasa’s mills are based in Spain. The company recently increased its longs production range with the acquisition of ArcelorMittal’s mill in Zaragoza that has 300,000 mt/year of sections capacity, so acquisition of a mill in Germany could help increase its European market share. Megasa did not reply to enquiries by S&P Global Platts on this matter.
Gallardo used to be the owner of SWT. It sold the company back in 2012 to CSN, after having bought it in 2006 from ArcelorMittal. Gallardo did not respond to a Platts enquiry, nor did CSN.
According to sources close to the deal, SWT has turnover of around Eur420-450 million with Ebitda at around 10%. The company has one EAF at 1.1 million mt/year capacity, and in recent years has produced around 800-850,000 mt/year of sections.
According to an informed industry analyst, ArcelorMittal has around 45% of the European sections market. According to European Steel Association Eurofer, in 2018 the EU’s market supply of beams totaled approximately 7.4 million mt. Imports accounted for less than 6%.
— Annalisa Villa and Adriana Carvalho