ThyssenKrupp AG, Germany’s biggest steelmaker, has asked companies to resubmit offers for its unprofitable Americas unit after original bids were deemed too low, according to people familiar with the matter.
Interested bidders must hand in new bids to the Essen-based company by the deadline today, said the people, who asked not to be identified because talks are private. ThyssenKrupp is seeking at least the $9 billion book value of the plants in the U.S. and Brazil to avoid writedowns, they said.
ThyssenKrupp attracted about eight initial bids for its U.S. and Brazilian plants at the end of September, people familiar with the matter said earlier this month. Posco, ArcelorMittal, Nippon Steel & Sumitomo Metal Corp., JFE Holdings Inc., Nucor Corp., U.S. Steel Corp., Cia. Siderurgica Nacional SA and Ternium SA handed in indicative offers for one or both of the locations, they said at the time.
Stefan Ettwig, a spokesman for ThyssenKrupp, declined to provide details or comment on the process.
European and North American steel firms are looking to cut costs and sell assets amid competition from Asian players like China’s Baoshan Iron & Steel Co. Chinese Prime Minister Wen Jiabao is overseeing a $23 billion investment in new mills to stimulate automaking and housing in the world’s second-largest economy, where growth has slowed this year.
ThyssenKrupp said in May that a sale of its Alabama and Rio de Janeiro state plants is among “strategic options” as it grappled with the rising costs. Heinrich Hiesinger, ThyssenKrupp’s chief executive officer, said in August he wants to sell the unit for its book value of at least $9 billion.
The plants may fetch $3 billion to $5 billion, the people said earlier this month. Steel Americas’ adjusted loss before interest and taxes grew to 778 million euros ($1 billion) in the first nine months of the fiscal year ended Sept. 30 as production costs outstripped expectations amid sluggish steel prices.