By Tom Käckenhoff and Christoph Steitz
FRANKFURT – Thyssenkrupp has agreed to sell its Italian stainless steel division to Arvedi as part of the conglomerate’s wider restructuring efforts, it said on Thursday.
The German group’s Acciai Speciali Terni (AST) division is Europe’s fourth-largest stainless steel producer behind Finnish rival Outokumpu, Luxembourg-based Aperam and Spain’s Acerinox.
AST has been on Thyssenkrupp’s list of potential disposal candidates for years and marks the biggest item in list of businesses it wants to sell, restructure or close.
“This transaction has a compelling industrial rationale for Arvedi Group, which becomes stronger by successfully completing its product mix,” said Arvedi President Cavaliere Giovanni Arvedi said.
“Furthermore, this transaction is strategic for the whole Italian economy and represents an initial step towards new, exciting developments.”
The deal, which also covers AST‘s associated sales organisation in Germany, Italy and Turkey, is expected to close in the first half of 2022.
No purchase price was disclosed.
A source close to the deal said valuations for AST from various bidders ranged between 500 million and 700 million euros ($824 million) but declined to say what the winning bid was worth.
The source said that Arvedi and Italy’s Marcegaglia had both made binding bids while Korean and Chinese bidders had dropped out on concerns the Italian government could exercise special powers to protect what it considers a strategic industry.
Italy’s Industry Minister Giancarlo Giorgetti on Thursday said the deal was an important step in the relaunch of Italian steel.
“We welcome the fact that ownership has been transferred to an Italian group,” he said in a statement.
AST employs about 2,700 staff and posted sales of about 1.7 billion euros in its past financial year to Sept. 30.
Thyssenkrupp could yet decide to keep a minority stake in AST, it said.
The German conglomerate has made a string of disposals recently, including the sale of its mining technology business to Denmark’s FLSmidth in July and the disposal of its infrastructure and carbon components operation.
“This fourth transaction shows once again, clearly, that we are working through our priorities and making decisive progress in the transformation of Thyssenkrupp,” CEO Martina Merz said.
“Speed in focusing the portfolio is crucial for a successful change process.”
($1 = 0.8491 euros)