comments

Report: ThyssenKrupp gets final bids for Steel Americas plants

Ellen Mitchell | emitchell@al.com By Ellen Mitchell | emitchell@al.com
on March 01, 2013 at 7:46 PM
tk.JPG The ThyssenKrupp plant, Dec. 10, 2010 in Calvert, Ala. (Press-Register file photo)  

Final bids are in for ThyssenKrupp AG's carbon steel plants in Brazil and Alabama, but they are expected to fall far below what the company hoped to get for its Steel Americas unit, the Wall Street Journal reported.

Citing people familiar with the matter, the Journal said the two bidders most likely to win are a joint venture between steel producers ArcelorMittal and Nippon Steel & Sumitomo Metal Corp., and Brazilian company Cia. Siderurgica Nacional SA.

In January, Luxembourg-based ArcelorMittal and Japanese company Nippon-Sumitomo reportedly submitted a $1.6 billion bid for ThyssenKrupp Steel USA in Calvert, while CSN reportedly made a $3.8 billion bid for both the plant and a majority stake in ThyssenKrupp's Brazilian mill.

Nucor Corp. also is reportedly in the running for the Calvert facility, bidding $1.5 billion for it, while U.S. Steel Corp. and JFE Steel Corp., have shown interest in it as well.

In a statement, ThyssenKrupp did not name names, but said due diligence work by interested parties "has largely been completed," and "All the participants in the due diligence process continue to show strong interest in an acquisition," according to the Journal.

ThyssenKrupp CEO Heinrich Hiesinger, who said in August that he wanted to get the book value in bids, said he expects to sign off on the sale in May and hopes to close the deal by the end of September.

Germany's biggest steelmaker, ThyssenKrupp produces carbon steel slabs in Brazil that it ships to Alabama for finishing in Calvert. The twin plants, which cost $11.8 billion to build in 2007 but are now valued at about $5.1 billion, were meant to give the company a foothold in the Americas, where it already sold products into the automotive industry.

However, the plants are bound by an agreement dictating a pre-determined, and now artificially high price for the slabs sent to Calvert. That, combined with wage increases in Brazil and the slow U.S. economic recovery, has wreaked havoc on the Americas plants' margins.

The company has recorded losses of more than $15.7 billion for the mills.

Read the full WSJ report here.