London: ArcelorMittal and Nippon Steel and Sumitomo Metal Corp., the two largest steel makers by market value, are nearing an agreement to buy ThyssenKrupp AG’s Alabama plant for about $1.5 billion, according to two people familiar with the situation.

An announcement could come as early as this week, said the people, who asked not to be identified because the accord hasn’t been made public. As part of the deal, the buyers agreed to take steel from ThyssenKrupp’s CSA plant in Brazil for processing at the US site, one of the people said.

Robin Zimmerman, a spokesman for Essen, Germany-based ThyssenKrupp, declined to comment on the deal and referred to a 19 November statement in which the company said it was in exclusive talks for the potential sale of the Alabama plant. A spokeswoman for Luxembourg-based ArcelorMittal declined to comment. Tsuyoshi Yoshizumi, a spokesman for Nippon Steel & Sumitomo, declined to comment.

ThyssenKrupp, Germany’s largest steelmaker, has spent the past 18 months trying to offload its Steel Americas segment, which includes both the Alabama and Brazilian operations. The company has spent almost €12 billion ($16.3 billion) on the plants. After a number of writedowns following a slump in steel prices, the Americas unit has a book value of €3.4 billion. The Alabama sale was reported earlier by Nikkei.

Chief executive officer Heinrich Hiesinger also sought to sell the unit as part of a strategy of diversifying away from steel. He plans to build up operations from elevators to auto parts and marine services.

Americas losses

The company controls 73% of the CSA steel plant in the state of Rio de Janeiro. Vale SA, the largest iron-ore producer and a supplier to the plant, owns the rest.

ThyssenKrupp, with a market value of €9.7 billion ($13 billion), built CSA, which has a capacity of 5 million metric tons a year, to supply steel slabs to its US and German mills. Nippon Steel has a market value of $31 billion and ArcelorMittal is worth $27.7 billion.

Steel Americas reported an adjusted loss before interest and taxes of 261 million euros in the nine months through June 30, compared with €778 million a year earlier. BLOOMBERG