Serbia Seeks to Keep Danieli Investment After Croatia Purchase

Serbia will ask Danieli SpA (DAN), Italy’s biggest steel-mill engineering company, to keep a planned 500 million-euro ($624 million) investment in the country, even after it opted for iron mills in neighboring Croatia.

Danieli has “postponed until further notice” the plan to set up a steel plant in Sabac, western Serbia, after buying CMC Sisak d.o.o., a unit of U.S. Commercial Metals Co. (CMC), in Sisak, eastern Croatia, said Boris Tadic, Serbia’s former president, who aspires to become the new prime minister.

“We will fight for them, but this is not a good signal,” Tadic told reporters in Belgrade today, after meeting with President Tomislav Nikolic on efforts to gather a ruling coalition. He said he’d urge Danieli officials to resume the Serbian investment.

Political uncertainty in Serbia where parties have been unable to form a government a month after May 6 elections, was a factor in the Danieli decision, Tadic said.

Buttrio, Italy-based Danieli signed a memorandum of understanding with Serbia on March 29 on developing the plant in Sabac that would produce some 750,000 tons a year and whose clients might include Fiat SpA (F)’s car factory in Kragujevac, central Serbia.

Danieli spokesman Paolo Messina declined to comment when contacted by Bloomberg.

To contact the reporter on this story: Misha Savic in Belgrade at msavic2@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net

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