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Since November 2023, Amsa has threatened to shut two loss-making mills that produce grades of steel essential to the automotive and mining industries.
ArcelorMittal SA ‘s talks to sell its local unit to South Africa’s state-owned Industrial Development Corp are being held up by differences over the entity’s valuation, according to people familiar with the matter.
While the IDC and ArcelorMittal may still reach an agreement on the fate of ArcelorMittal South Africa before the end of the due diligence period on September 30, the Luxembourg-based company is seeking considerably more than was initially offered, the people who are aware of the development said. Offers of as much as R7 billion (US$396 million) for Amsa have been discussed, they said.
Talks about a takeover by the IDC — the steelmaker’s second-biggest shareholder after billionaire Lakshmi Mittal’s ArcelorMittal — have emerged as the South African authorities try to preserve steel operations crucial to the domestic economy. Since November 2023, Amsa has threatened to shut two loss-making mills that produce grades of steel essential to the automotive and mining industries.
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Earlier this year, the IDC and South Africa’s Department of Trade, Industry and Competition brokered a deal with Amsa to extend a loan and to consider boosting its 8.2% stake. In return, the DTIC agreed to review Amsa’s complaints about competition from cheap imports, scrap-metal discounts for rivals, high electricity costs and inefficient rail services.
