ArcelorMittal, Marcegaglia submit offer to buy Italy's Ilva

The offer included a commitment to bringing Ilva in-line with European environmental standards and legislation

Global steel giant ArcelorMittal and Italian group Marcegaglia on Thursday said they have submitted an offer to acquire Italy's loss-making Ilva plant as the consortium was the best equipped to take on the challenges of the plant's turnaround.

The NRI-billionaire Lakshmi Mittal headed company said, "The offer details consortium's industrial and environmental plans for Ilva", as it intended to raise primary utilisation rate with crude steel production rising from the current level of 4.8 million tonnes per annum (MTPA) to over 6 MTPA by 2020.

The offer included a commitment to improve Ilva's environmental performance through installation of best available technology, bringing Ilva in-line with European environmental standards and legislation, it added.

The consortium will also look to induct new, innovative steel grades, facilitating an increase in proportion of high value-added products in Ilva's product mix and a commitment to guaranteeing employment at industry best practice levels.

"The submission of the bid is the first step in a multi-stage process that will see only environmental part of the offer discussed for the next 120 days. Following this period, the government will provide more clarity on the next steps of the offer process," the statement said.

Geert Van Poelvoorde Executive Vice President and CEO, ArcelorMittal Europe Flat Products, said: "We believe Ilva represents a compelling investment opportunity for ArcelorMittal, without compromising our balance sheet strength as it would extend our leadership position and increase our product offering in Italy, Europe's second largest steel manufacturing and consuming market."

Poelvoorde added that ArcelorMittal's plan in the first stage centres on the three blast furnaces in operation with an aim to invest to improve product mix, quality and productivity in order to return the plant to profitability.

Antonio Marcegaglia Chairman and CEO of Marcegaglia, said: "Ilva has always been a vital asset in the entire Italian steel chain and we need to ensure it can continue to be in the long-term."

ArcelorMittal is the world's leading steel and mining company with a presence in 60 countries and an industrial footprint in 19 countries.

In 2015, ArcelorMittal had revenues of $63.6 billion and crude steel production of 92.5 million tonnes, while own iron ore production reached 62.8 million tonnes.