TribLIVE

| Home


Weather Forecast
 
Larger text Larger text Smaller text Smaller text | Order Photo Reprints

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

Daily Photo Galleries

By Bloomberg News
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.

 

 
 


Show commenting policy

Most-Read Stories

  1. Father charged in girls’ dresser death; Beaver DA believes they might have lived had her responded faster
  2. Five questions facing Steelers entering training camp
  3. Steelers are in familiar territory going into training camp in Latrobe
  4. Shuey burger star of ‘bashes’
  5. Rossi: Johnston must reach Malkin in Moscow
  6. New workout craze Piloxing combines mix of disciplines
  7. Truck crashes into Dairy Queen, 6 injured in Penn Hills
  8. Durbin warns Walgreen against move
  9. Report of attempted child luring in Hempfield a hoax, police say
  10. Do blacks need favors?
  11. When the future isn’t always bright
Subscribe today! Click here for our subscription offers.