Lakshmi Niwas Mittal to sell US plant, brother may bid
MUMBAI: The latest churn in global steel may see Lakshmi Niwas Mittal in the garb of a seller.
And the buyer? Could very well be one of his younger siblings, Pramod.
A fiat by the US Justice Department is forcing Arcelor Mittal, the world’s largest steelmaker owned by Mittal, to sell its Sparrows Point steel plant in Baltimore, Maryland.
Mittal will thus have to invite bids for the Baltimore plant, which makes under one million tonne of tin plate for American auto giants, apart from two million tones of steel.
Mittal had earlier planned to sell the Weirton mill, which is a loss-making entity, and had signed an MoU with Esmark Inc, a Chicago-based steel producer and distributor.
Now he will perhaps retain Weirton, which is bigger than Sparrows Point facility.
A Wall Street Journal report said Sajjan Jindal’s JSW Steel and Pramod Mittal’s Ispat Industries along with a slew of Chinese and Russian steel companies may be contenders.
Sajjan Jindal recently declared that he’s scouting for 1-2 million tonne annual capacity steel companies in Europe or other advanced markets.
“Our bite is small,” Jindal said, after announcing the company’s third-quarter results in January this year.
The Baltimore plant is a fit — it’s profitable and has a little less than one million tonne per annum tinplate making capacity.
However, Seshagiri Rao M V S, director-finance, JSW Steel, told DNA Money JSW is not in the race. “We have not seen the proposal nor have we considered it yet,” he said.
Vinod Mittal, younger brother of Pramod Mittal’s, declined to comment.
An Ispat Industries spokesperson, however, termed the talk as highly speculative.
However, steel analysts said Pramod Mittal’s Global Steel Holdings could be in the fray as it has shown an appetite for acquiring assets in East Europe and Africa.
Pramod Mittal is said to be returning on Wednesday night from Nigeria and could not be reached for a response from Global Steel Holdings.
The Baltimore plant was earlier known as Bethlehem Steel and was acquired by Wilbur L Ross. In investor circles, Ross is known by his sobriquet ‘Vulture Investor’ because he buys troubled firms, turns them around and sells for big profits.
A couple of years back, Ross merged his US steel business called International Steel Group with Mittal Steel.
Industry analysts said it would need tremendous courage for Indian companies to gobble up a US steel outfit, as these are high-cost operations.
However, the fact that the Sparrow’s plant is a profitable enterprise may attract domestic firms to throw their hat in the ring. The selloff is being forced as the Justice Department felt it would remedy “concerns about competition” arising from the mega merger that spawned Arcelor Mittal.
Among the contenders also include Russia’s Evraz Group or OAO Severstal Group, both of which already own US operations.
China’s Wuhan Steel Corp oration and Anshan Iron & Steel Group also have a good deal of cash and are considering expanding, the paper said.
Brazil’s Companhia Siderurgica Nacional, which failed in two bids - for Wheeling-Pittsburgh Corp in the US and Corus Group Plc in the UK — may be a prospective bidder, say reports.
MUMBAI: The latest churn in global steel may see Lakshmi Niwas Mittal in the garb of a seller.
And the buyer? Could very well be one of his younger siblings, Pramod.
A fiat by the US Justice Department is forcing Arcelor Mittal, the world’s largest steelmaker owned by Mittal, to sell its Sparrows Point steel plant in Baltimore, Maryland.
Mittal will thus have to invite bids for the Baltimore plant, which makes under one million tonne of tin plate for American auto giants, apart from two million tones of steel.
Mittal had earlier planned to sell the Weirton mill, which is a loss-making entity, and had signed an MoU with Esmark Inc, a Chicago-based steel producer and distributor.
Now he will perhaps retain Weirton, which is bigger than Sparrows Point facility.
A Wall Street Journal report said Sajjan Jindal’s JSW Steel and Pramod Mittal’s Ispat Industries along with a slew of Chinese and Russian steel companies may be contenders.
Sajjan Jindal recently declared that he’s scouting for 1-2 million tonne annual capacity steel companies in Europe or other advanced markets.
“Our bite is small,” Jindal said, after announcing the company’s third-quarter results in January this year.
The Baltimore plant is a fit — it’s profitable and has a little less than one million tonne per annum tinplate making capacity.
However, Seshagiri Rao M V S, director-finance, JSW Steel, told DNA Money JSW is not in the race. “We have not seen the proposal nor have we considered it yet,” he said.
Vinod Mittal, younger brother of Pramod Mittal’s, declined to comment.
An Ispat Industries spokesperson, however, termed the talk as highly speculative.
However, steel analysts said Pramod Mittal’s Global Steel Holdings could be in the fray as it has shown an appetite for acquiring assets in East Europe and Africa.
Pramod Mittal is said to be returning on Wednesday night from Nigeria and could not be reached for a response from Global Steel Holdings.
The Baltimore plant was earlier known as Bethlehem Steel and was acquired by Wilbur L Ross. In investor circles, Ross is known by his sobriquet ‘Vulture Investor’ because he buys troubled firms, turns them around and sells for big profits.
A couple of years back, Ross merged his US steel business called International Steel Group with Mittal Steel.
Industry analysts said it would need tremendous courage for Indian companies to gobble up a US steel outfit, as these are high-cost operations.
However, the fact that the Sparrow’s plant is a profitable enterprise may attract domestic firms to throw their hat in the ring. The selloff is being forced as the Justice Department felt it would remedy “concerns about competition” arising from the mega merger that spawned Arcelor Mittal.
Among the contenders also include Russia’s Evraz Group or OAO Severstal Group, both of which already own US operations.
China’s Wuhan Steel Corp oration and Anshan Iron & Steel Group also have a good deal of cash and are considering expanding, the paper said.
Brazil’s Companhia Siderurgica Nacional, which failed in two bids - for Wheeling-Pittsburgh Corp in the US and Corus Group Plc in the UK — may be a prospective bidder, say reports.