ArcelorMittal Willing to Sell Off EU Assets to Obtain Ilva

The sale of the assets would be subject to approval by the European Commission and contingent on the successful acquisition of Ilva. The EC is expected to announce its final decision by May 23.

In November, the European Commission opened an in-depth investigation into the proposed acquisition of Ilva Steel by ArcelorMittal. The EC was concerned the merger would reduce competition for flat carbon steel products.

Wrote the Commission in a Nov. 8 press release:

“At this stage, the Commission is concerned that, following the transaction, customers would face higher prices, particularly in Southern Europe, for these important inputs. These customers include numerous companies, many of which are small and medium-size enterprises (SMEs). They are active in sectors ranging from construction to car manufacturing, household appliances, tubes and many more. Many of those industries compete with imported products in the EEA, or export their products outside Europe and compete globally.

“The Commission will also further investigate whether the transaction could have an effect on the supply and prices of certain other products, such as metallic coated steel for packaging.”

ArcelorMittal hopes the divestment will alleviate any concerns the Commission may have regarding pricing impact and competition. The proposal was met with dismay by government officials in Luxembourg where the Dudelange facility is located.

Economy minister Étienne Schneider and Dudelange Mayor Dan Biancalana, responded on Monday by sending a joint open letter to competition commissioner Margrethe Verstager criticizing the EC for its approach to the merger. Divestment of the ArcelorMittal assets “prevents the preservation of a competitive industrial base in Europe, which is nevertheless necessary for economic growth and job creation” said the minister and mayor in the letter.

In a statement released on Friday afternoon, Schnieder said he would intervene with the management of ArcelorMittal and with the commission in Brussels in order to keep Dudelange the property of the group.

“By forcing ArcelorMittal to divest production sites in Europe, the commission is acting against the interests of European industrial policy by hindering the creation of a true European steel champion from competing on the world market,” he said.

ArcelorMittal is currently in a bidding war with JSW and NuMetal for the acquisition of another steel operation, India’s Essar Steel.