Chicago: Arcelor Mittal, the world’s largest steel company,chose a short list of potential buyers for a Baltimore steel mill, which is being shed to comply with an antitrust ruling to divest the facility.
“A narrowed list of bidders has been invited to proceed with the analysis and diligence” of the Sparrows Point plant, Adam Warrington, a Mittal spokesm an in Chicago, said on 31March. The plant may fetch as much as $2.5 billion (Rs10803 crore), Credit Suisse said in a report.
Esmark Inc, a closely held U.S. Steel distributor, was selected, President Craig Bouchard said. “A dozen” potential buyers, including private equity firms and non-U.S. steelmakers had shown interest in the Sparrows Point plant, which can produce 3.5 million tonnes a year, Luxembourg-based Mittal said.
Sparrows Point accounts for 17% of North American production capacity. The U.S. Justice Department ruling followed Mittal’s $38.3 billion acquisition of Arcelor SA last year. The agency issued its order on 20 February.
“We are excited at the prospect of being included in the second round of bidders and look forward to working with the United Steelworkers, the state of Maryland and the employees of Sparrows Point,” Bouchard said.
CSN, Tata, Evraz
Companhia Siderurgica Nacional, Brazil’s third-largest steelmaker, may try to acquire the plant, Luiz Migliora, a U.S. executive at the company, said on 20 March.
Sparrows Point, a tin-plate plant located in a deep-water port, may be attractive to CSN because it controls almost the entire tinplate market in Brazil and has access to raw materials, said Scott Burns, an analyst at Morningstar Inc. in Chicago. Russian steelmaker Evraz Group and India’s Tata Steel Ltd may also be seeking steel assets in North America, he said.
Mittal must shed the business to ensure competition in the tin-plate market as a condition for obtaining U.S. antitrust approval for the Arcelor acquisition. Tin-mill products are finely rolled steel sheets, usually coated with tin or chrome, and used to make food cans.
Mittal had planned to sell a plant in Weirton, West Virginia, to satisfy the antitrust ruling. It canceled a deal with Esmark after the Justice Department’s decision on Feb. 20.