ThyssenKrupp AG (TKA), Germany’s biggest steelmaker, narrowed the bidders for its U.S. and Brazilian assets in a sale process that may fetch more than $3 billion, according to people familiar with the matter.
Cia. Siderurgica Nacional SA (SID), a Brazilian steelmaker, is planning a binding offer for both a site in Alabama and a plant in the state of Rio de Janeiro without the direct financial support of the Brazilian development bank, known as BNDES, according to one person, who asked not to be identified because talks are private. The company intends to make a $3 billion offer in May, the person said.
Ternium SA (TX) has already made a binding bid for the Brazilian plant, the people said. ArcelorMittal (MT) with Nippon Steel & Sumitomo Metal Corp. (5401) and U.S. Steel Corp. (X) are in the running for the U.S. site, while Japan’s JFE Holdings Inc. (5411) and Nucor (NUE) of the U.S. are out of the running, they said. The U.S. site may fetch between $1.5 billion and $2 billion, according to the people.
ThyssenKrupp Chief Executive Officer Heinrich Hiesinger is selling the Steel Americas plants as waning demand from the auto and construction industries and competition from China weakens prices and squeezes profit margins. The company, based in Essen, Germany, in December canceled its dividend after posting a second-straight annual loss following a 3.6 billion-euro ($4.7 billion) writedown on the Americas unit.
ThyssenKrupp plans to select a winner before a board meeting scheduled for the middle of May, two of the people said.
“The sale process is proceeding to plan,” Stefan Ettwig, a spokesman at ThyssenKrupp, said by phone from Essen, declining to comment on timetables, bidders or valuations.
Representatives for ArcelorMittal, CSN, Nippon Steel, Nucor, Ternium and U.S. Steel declined to comment. JFE couldn’t immediately be reached for comment after business hours. BNDES also declined to comment on the matter.
The sale of the Steel Americas division would cut the number of business units to five from eight. Steel Americas, labeled a discontinued operation, reported an adjusted loss before interest and taxes of 87 million euros the fiscal first quarter, compared with a loss of 288 million euros a year earlier. ThyssenKrupp said in February group profit slumped 38 percent in the period as the economic slowdown eroded demand.
CSN, as the third-largest Brazilian steelmaker is known, gained 0.6 percent to 8.08 reais at 12:58 p.m. in Sao Paulo, erasing a 5.2 percent drop earlier. The company rose 2.3 percent on Jan. 29 after newspaper Valor Economico reported CSN may get as much as 4 billion reais ($2 billion) from BNDES to buy the ThyssenKrupp assets. ThyssenKrupp rose 1.5 percent to close at 14.25 euros in Frankfurt.
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