ArcelorMittal among suitors to buy Italian steelmaker Ilva
11 February 2014
ArcelorMittal, the world's biggest steel producer, is among a number of companies seeking to acquire Italian steelmaker Ilva, which is deep into a controversy over pollution caused by its operations.
Privately-run Ilva, which operates Europe's biggest steel plant in the southern Italian city of Taranto, is faced with the huge cost of an environmental clean-up plan ordered by the government, which it cannot support, sources said.
Ilva, controlled by the Riva family, is a maker of flat steel products used by manufacturers of automobiles, electrical appliances and shipS.
ArcelorMittal has shown interest in buying Ilva in part or whole, reports said although the Riva family as well as ArcelorMittal declined to comment on the news.
Reports also said Italian steel groups Marcegaglia and Arvedi as also Chinese and Russian steel makers are interested in acquiring Ilva.
However, any offer would depend on the cost of the plan ordered by the government to reduce pollution levels around the Taranto plant, which is estimated to reach around 3 billion euros ($4 billion).
For Ilva, which is under special administration since last year over alleged toxic emissions from the Taranto plant caused abnormally high rates of cancer and respiratory illnesses in the surrounding region, sale is a pressing necessity.
"Ilva is losing money so finding a solution for the plant has become more pressing. The problem is that it is hard to plan anything until there is more clarity on the environmental restructuring," the industry source said.
For ArcelorMittal, a stake in Ilva would give the Luxembourg-based steel giant greater control over the price of steel in southern Europe.
The Taranto plant of Ilva is currently producing about 20,000 tonnes of steel per day, or about 7.0 million metric tonnes per year, compared with an output of 6.3 million tonnes in 2013 and 8.3 million metric tonnes in 2012.
The company is also looking at the option of reducing working hours for is 3,500 employees, a third of workers at the Taranto plant, in a bid to save money.