ILVA takeover even without Marcegaglia

Paris - In the event of an exit of the Marcegaglia Group from Am InvestCo we’re open both to an increase in Banca Intesa’s share, and to the entry of Cassa Depositi e Prestiti (CDP). The two options are equivalent for ArcelorMittal.” These were the cautious comments made by Aditya Mittal, CEO of ArcelorMittal Europe, and financial director of the steel group, on the sidelines of the ArcelorMittal Day held in Paris; he was speaking regarding the possibility that the European Antitrust Authority may impose conditions on the takeover bid, which according to rumours would present elements of market concentration, likely to impact prices should the acquisition go ahead. Such conditions would involve “dropping” steel market player Marcegaglia (which currently forms part of Am InvestCo with a 6 percent share, while Mittal holds 88 percent, and Intesa another 6 percent) in order to conform to EU rules on market competition. “The entry of CDP into the joint bid, as my father had already suggested, or an increase in the presence of Intesa in the company, are for us equivalent options,” said Mittal junior. According to informed sources what most worries the steel group is not so much the likely remedies that the European antitrust could impose as a way to remove the obstacles to ILVA’s acquisition by the global giant, but the time constraint set for the ongoing procedure in Brussels, which had extended the deadline for a response to March 23, 2018. And, right on time, yesterday saw a reassurance from EU Commissioner of the Competition Directorate, Margrethe Vestager, who spoke of a will to be “one step ahead of the prescribed deadline”.

“We need to be quick, and if we find any issue with competition it will be up to the buyer to deal with it, to show resolve and clarity,” she said. “Everyone’s worried about finding a solution for the merger between ILVA and ArcelorMittal,” said the Commissioner. “It is an important matter that has been going on for some time now. There is also an underlying issue related to the environment.” Vestager also reiterated that cooperation with Italian authorities was “good” and “solid”: “We are now examining with the buyer some issues related to competition.” During the ArcelorMittal Day, a day dedicated to the European media, including Secolo XIX, Aditya Mittal talked about the group’s investments in digitalization: “2017 was a fundamental year for digitalization within the company. We’ve been focusing on that process, for the benefit of our customers.” In relation to the industrial plan presented for the acquisition and relaunch of ILVA, ArcelorMittal plans to increase production at Genoa Cornigliano to surpass the current 170,000 tons, but at the same time to cut 600 jobs, out of a workforce of 1,499. Asked how the group would increase production at lLVA’s facilities in northern Italy while cutting jobs, (54 layoffs are expected at Novi Ligure, too), the top-manager replied that “the challenge of the European steel industry hinges on productivity increases and on new technologies.” The Am InvestCo plan for ILVA provides for the purchase of the Genoa, Taranto and Novi Ligure plants at a price of 1.8 billion, and investments for another 2.4 billion, of which 1.15 billion for environmental rehabilitation at the Taranto plant, and 1.25 billion for industrial upgrading and modernization works.

The industrial plan for the Genoa facility, which extends to 2024, provides for investment pledges worth 123 million euro, of which 52 million for ordinary maintenance over the seven-year period, 20 million for new equipment for the zinc-coating line, but only 15 million for upgrades on the tinplate production line, considered “insufficient for the Genoa site” by both the union and by Federmanager.