Thyssen seeks binding bids for US, Brazil mills

REUTERS

FRANKFURT

THYSSENKRUPP will open its books to remaining prospective bidders for its US and Brazilian steel mills and ask them to make binding offers for the loss-making plants, the company said on Monday.

ThyssenKrupp said in May it was considering all options for the mills, including a partnership or a sale, to halt losses there and concentrate on its European business. The plants were supposed to give it a foothold in the Americas but have struggled with rising costs and weak demand.

“In the second phase that has now been started, selected bidders will be given the opportunity to analyse the plants in a so-called ‘due diligence’ and to make binding offers,” the German steel and technology group said in a statement.

It reaffirmed that the two steel mills which comprise its Steel Americas unit could be sold in a bundle or separately.

Two people close to the process told Reuters last week that second-round offers were due last week and the field of bidders for the mills was down to around half a dozen.

They said at the time that US Steel and rival Nucor were still in the running, as were Japanese groups JFE Steel Corp and Nippon Steel, and Brazil’s CSN. Final bids were due next month, the sources said.

South Korea’s Posco, China’s Baosteel and Brazilian iron ore miner Vale, which owns just over a quarter of ThyssenKrupp’s Brazilian plant, are not bidding. It was not clear whether ArcelorMittal, the world’s biggest steelmaker, was still in the running. ThyssenKrupp Chief Executive Heinrich Hiesinger has said he would want to sell the mills separately for at least their combined book value of 7 billion euros ($9 billion), a target that analysts have viewed with scepticism.

Sources told Reuters last month that ThyssenKrupp asked bidders to resubmit their offers because it deemed the initial bids too low. US-based AK Steel Holding Corp has also said it might be interested in the two steel mills.

Steel Americas, the division that includes both sites, posted an adjusted loss before interest and tax of 778 million euros for the nine months to the end of June and is reportedly heading for a full-year loss of more than 1 billion euros.