Liberty to acquire four ArcelorMittal mills

Liberty to acquire four ArcelorMittal mills

Transaction will double the U.K, firm’s steelmaking capacity.

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October 12, 2018
Edited by Brian Taylor
Europe Ferrous Financial

United Kingdom-based Liberty House Group, part of Sanjeev Gupta’s global GFG Alliance, has announced a conditional agreement to buy four integrated steel mills in Europe from Luxembourg-based ArcelorMittal. The four mills are part of a divestment package ArcelorMittal agreed to with the European Commission during a merger control investigation into the company’s acquisition of Italy-based steelmaker Ilva SpA.

Liberty says the acquisition of the four integrated mills—located in Ostrava, Czech Republic; Piombino Italy; Skopje, Macedonia; and Galati, Romania—will put the firm “at the heart of the continent’s steel industry and cement its global role in the sector.”

The transaction, which would take Liberty’s total rolling capacity to more than 15 million metric tons per year, is subject to approval by the European Commission and scrutiny in other processes, including what Liberty calls “the conclusion of information consultations with local and European Works Councils.”

“I am delighted to announce this landmark transaction, our biggest milestone to date,” says GFG Alliance Executive Chairman of Sanjeev Gupta. “At a stroke, these acquisitions would almost double the size of our workforce and global production capacity, giving us a strong presence in the heart of Europe’s key manufacturing regions. We intend to work with local partners to position ourselves strongly within the domestic supply chains of these fast-expanding national economies and become a pivotal part of a thriving European industrial sector. These are high-quality assets with highly-skilled staff whom we’re looking forward to welcoming into the GFG Alliance.”

Following completion of the deal, Liberty says it intends to continue investing in the assets and aims to achieve greater competitiveness through low-carbon production and closer integration with added-value downstream manufacturing, as part of its “Greensteel” strategy.

The four sites in the package have a combined rolling capacity of around 8 million metric tons per year and would give Liberty the ability to supply a range of finished steels including plate, hot rolled coil, cold rolled coil, galvanized sheet, tin plate, bar, wire rod, and rail. The plants serve domestic and wider European markets in the automotive, construction, industrial machinery, oil and gas and other sectors.

Liberty describes its position in the U.K. as being a steel and aluminum supplier to the automotive, aviation and specialist engineering sectors, and in Australia as a supplier of steel for the building and infrastructure segments. The group also makes steel at a mill in South Carolina in the United States for the automotive and other sectors.

The October announcement follows investments by Liberty in France, where it has acquired an aluminum wheel maker and has agreed to purchase an aluminum smelter in Dunkerque.

Liberty says it has worked closely with ArcelorMittal to prepare a transaction that satisfies the demands of the EU Commission and creates what it calls a secure future for the acquired mills within the GFG Alliance.

Mergers & acquisitions Steel Ferrous Scrap