Bloomberg reports that the Industrial Development Corporation (IDC) is apparently working with financial advisers on a possible bid of about R8.5 billion for control of ArcelorMittal SA’s (Amsa’s) business in SA.
If successful, the bid, which would include taking on debt, would end almost two years of negotiations with the state development finance institution, the government’s trade and industry department, and the global steelmaker. It could also pave the way for the entry of other international steel companies as the IDC apparently plans to seek strategic investors to run the plants. Amsa’s November 2023 announcement that it planned to shut two steel mills that produce grades that are crucial to SA’s automotive and mining industries sparked the talks. Those facilities, in Newcastle and Vereeniging, employ about 3,500 people, while some 100,000 more work at their suppliers or customers.
The IDC is the biggest shareholder in Amsa after its parent. No final decisions have been made and a transaction may not be concluded, according to knowledgeable sources. Still, one of them said, ArcelorMittal was likely to accept an offer of that size. In addition to the so-called long-steel plants it may close, Amsa operates a flat-steel plant, producing sheets and other products used in manufacturing and construction in Vanderbijlpark. It also owns idled facilities in Pretoria and in Saldanha, as well as a shuttered iron-ore mine that could be reopened.
- Read the full original of the report in the above regard by Loni Prinsloo & Antony Sguazzin at Moneyweb
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