Share This Page

8 bid on ThyssenKrupp's faltering U.S., Brazilian plants

| Thursday, Oct. 11, 2012, 7:12 p.m.

ThyssenKrupp AG, Germany's biggest steelmaker, has attracted about eight bids for its U.S. and Brazilian plants as it seeks to sell its unprofitable Americas unit, according to two people familiar with the matter.

ArcelorMittal, Posco, Nippon Steel & Sumitomo Metal Corp., JFE Holdings Inc., Nucor Corp., U.S. Steel Corp., Cia. Siderurgica Nacional SA and Ternium SA handed in indicative offers before the end of the September deadline, said the people, who asked not to be identified because talks are private. The German steelmaker may choose a shortlist of two or three bidders in November, they said.

Some of the larger international steelmakers such as ArcelorMittal and Posco may look at both the Alabama and Rio de Janeiro state plants, while the U.S. players are interested in the American site and the South American companies in the Brazilian plant, the sources said. The plants may fetch $3 billion to $5 billion, they said.

That's less than the book value of at least $9 billion that Heinrich Hiesinger, ThyssenKrupp's chief executive officer, said in August he envisioned getting for the unit.

Erin DiPietro, a spokeswoman for U.S. Steel, said the company doesn't comment on speculation, as did Giles Read, a spokesman for ArcelorMittal. Officials in CSN's press office declined to comment. Officials at Ternium didn't respond to calls and emails seeking comment. Officials at Nucor, Posco, JFE and Nippon Steel couldn't be reached for comment.

ThyssenKrupp announced in May that a sale of its U.S. and Brazilian plants is among “strategic options” as it grapples with rising costs.

of building plants in Brazil and the United States as the projects suffer delays. The Essen-based company was already divesting assets contributing about a quarter of annual revenue before that decision, including its stainless-steel business, as it seeks to reduce debt and fund growth.

ThyssenKrupp started operating its Brazilian plant in 2010, two years later than originally planned, to provide steel slabs to its mills in Alabama and Germany. The two American plants, on which ThyssenKrupp has spent more than 10 billion euros ($13 billion), according to Hiesinger, were meant to work as an integrated network.

Delays at the Brazilian plant, 73.1 percent-held by ThyssenKrupp and the rest by Vale SA, contributed to impairment charges of 2.9 billion euros in the fiscal year ended Sept. 30, 2011, for which the company reported a loss. The Steel America's adjusted loss before interest and taxes accumulated to 778 million euros in the first nine months of the following fiscal year as production costs were higher than originally expected and steel prices increased less than expected.

ThyssenKrupp declined to comment on the number or names of bidders. Kilian Roetzer, a company spokesman, pointed to a statement published on Sept. 28 saying: “Interest in both plants remains very high and has been reinforced by on-site inspections.”

German newspaper Die Welt on Oct. 10 reported that at least 5 bidders had submitted offers.

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.