U.S. Steel may be in on bid for mills of German firm
Bidders competing for ThyssenKrupp AG's loss-making American and Brazilian steel mills are teaming up in an effort to make the investment more digestible, according to people familiar with the transaction.
ThyssenKrupp, Germany's biggest steelmaker, said in May that it was considering options for the mills, which lost about $1.34 billion in the financial year that ended in September, but deemed initial bids as too low. Sources said the bids were in the region of $4 billion to $5 billion.
Japan's JFE Steel Corp and U.S. Steel Corp. are planning to hand in a joint bid by a Feb. 28 deadline for final bids, two people familiar with the process said. U.S. Steel spokeswoman Courtney Boone declined to comment.
“The bidding process is running according to plan,” a spokesman for ThyssenKrupp said, without confirming the deadline for bids. “We are optimistic to find a solution by the end of the fiscal year.”
Europe's ArcelorMittal and Japan's Nippon Steel have joined forces in the auction, according to sources familiar with the process, though have not confirmed their plan, while Brazil's Cia Siderúrgica Nacional has secured financial support from state development bank BNDES.
ThyssenKrupp heavily wrote down the value of its Steel Americas unit to $5.22 billion in December. It had wanted to carve out new markets with two mills in Brazil and the United States, but they were hit by cost overruns, poor project management and weaker than expected demand.
Brazil's Vale, the world's No. 2 miner, owns a 27 percent stake in Thyssen's Brazilian plant, CSA, but has said it is not interested in buying Thyssen's stake.
Goldman Sachs and Morgan Stanley are advising Thyssen on the sale.
A downturn in the European steel market has prompted the group to shift investment to higher margin products such as elevators, plant components and submarines.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- MSA Safety products in demand to protect workers in dangerous jobs
- Emergency room visits decline as navigators steer patients to proper medical care
- U.S. Steel warns it may lay off almost 2,000 workers in Alabama, Texas
- Interest rates likely to stay low until fall
- Drops in gasoline prices won’t likely last, analysts say
- Energy companies vie for experienced workers with skills in high demand
- Shale sector won’t gut area workforce
- Milk industry swats back at ‘anti-dairy’ trend
- Energy-saving tactics pay off in Green Workplace Challenge
- Energy industry says it’s on top of methane leaks, but environmentalists want oversight
- Energy Spotlight: Adam Pope