DEPUTY PRIME-MINISTER VIOREL ŞTEFAN: "The sale of ArcelorMittal Galaţi will be done only with the explicit agreement of the Romanian state"

Ancuţa Stanciu (translated by Cosmin Ghidoveanu)
English Section /

ArcelorMittal may only sell the Galaţi metallurgic plant with the explicit agreement of the Romanian state, and the European Commission will ensure that the output of the plant will increase after the transaction, deputy prime-minister Viorel Ştefan said yesterday, in a conference on the issue of major industrial energy consumers.

He explained: "The transaction for the sale of the block of shares of ArcelorMittal to a potential investor is made under the monitoring of the European Commission. The transaction does not only concern the metallurgic plant of Galaţi, but also a compensatory package which ArcelorMittal offered to the European Commission, of which, out of the 7 manufacturing facilities included in that package, six will need to be acquired by a single investor. This transaction will be monitored by an individual authorized by the European Commission, so that the result will lead to increased production in the acquired plants rather than its decrease, because it would lead to undesired effects when it comes to competition on the market for cold-and hot-rolled products".

According to him, the contract for the privatization of the Sidex plant stipulates that ArcelorMittal needs the agreement of the Romanian state to sell the plant.

"The assignment may only be done with the explicit agreement of the Romanian government. There is a right that is mentioned in the privatization agreement, which states that the assignment may only be done with the help of the seller, namely the Romanian government", the deputy prime-minister said, and added that the representative of the European Commission will monitor the situation and in the coming five-ten years after the transaction: "Security measures will be taken and all the guarantees needed that the output in Galaţi will grow after this transaction, rather than shrink, and that will be valid for all the production units that are the object of this transaction".

Ionel Borş: "There are no talks with the Romanian authorities concerning a possible takeover of the plant by the Romanian government"

The European Commission will force the next buyer of Sidex Galaţi to increase the output production of the plant of Galaţi, to counter the increased market power that ArcelorMittal will have after the takeover of the steel mill of Italy, Bogdan Chiriţoiu, the president of the Competition Council said yesterday, in a conference on the issue of major industrial energy consumers.

He explained: "Next week there will be a talk in Brussels, and the Competition Offices of the member states will be asked for their opinions. What is important is that the officials of the European Commission are making the efforts for these manufacturing facilities to stay alive, because otherwise competition would be reduced. They want a competitor for ArcelorMittal to exist, which would not be too big to increase the prices for those that use steel in Europe".

According to him, ArcelorMittal would have to sell to a single investor the majority of the assets it wants to sell to be able to acquire the giant Italian plant: "According to the structure of these commitments, the European Commission would force ArcelorMittal to sell the majority of the assets put up for sale to a single buyer, for a bigger group to exist, and will ask for an increase in output at Sidex, to produce more than it currently does, precisely to offset the increased power that ArcelorMittal will have if it takes over the Italian plant".

Ionel Borş, country manager of ArcelorMittal Galaţi, gave assurances that the steel mill would continue to function, even though, among employees, there is still a state of concern: "Everything will be done according to European procedures. There is quiet at the plant, even though I do think that every person feels a bit of concern, but we are communicating with them. Additional production facilities can be opened capacities that can produce more (ed. note: at the plant - ed. note), so there is the possibility that we are going to increase production. The European community will not allow any new investor, regardless of who it is, to reduce output. On the contrary, it will ask it to keep the company sustainable".

Ionel Borş said that there is no discussion with the authorities concerning a possible takeover of the plant by the Romanian state.

When asked who were the main competitors of ArcelorMittal on a European level, which could take over the plant, he indicated ThyssenKrupp, Tata and Voestalpine, as well as other smaller producers.

Ionel Borş said: "I don't know if there are already talks between ArcelorMittal and these companies. Perhaps the rivals of Mittal are interested in the acquisition. This is an industry that is very interesting to many. The steel mill of Galaţi is attractive now, and the new investor will make it more attractive".

ArcelorMittal wants to acquire Ilva for 1.8 billion Euros (2.2 billion dollars)

The ArcelorMittal Group is about to obtain the approval of the European Union to acquire Ilva, the biggest European steel maker, after it committed to sell several production facilities in Europe, including the plant of Galaţi, in response to the concerns over competition, two sources close to the deal recently told Reuters, according to Agerpres.

Two weeks ago, ArcelorMittal offered to sell ArcelorMittal Piombino, the only galvanizing line in Italy, ArcelorMittal Galaţi, Romania, ArcelorMittal Skopje, Macedonia, ArcelorMittal Ostrava, Czech Republic, ArcelorMittal Dudelange, Luxemburg, and the galvanizing lines number 4 and 5 of Flemalle; the etching, and the cold-rolling and covered metallic packaging lines of Tilleur, all of these from the plant of Liege, Belgium.

According to the sources quoted by Reuters, the volume of assets which ArcelorMittal has offered to sell is a lot bigger than the concessions the group was initially willing to make.

With a bid of 1.8 billion Euros (2.2 billion dollars), ArcelorMittal wants to acquire Ilva, the biggest European steel maker, which employs over 14,000 people. Ilva, located in Taranto, southern Italy, manufactured annually nine million tons of steel, approximately 40% of Italy's steel output, and supplied steel for makers of cars and electrical equipment and ship builders. The Italian government temporarily took control of the Ilva steel mill, to oversee the cleanup works, after the mill was involved in a pollution scandal.

The European Commission expressed its concern that a transaction concerning the takeover of the biggest steel mill in Europe by the biggest maker of steel in the world could reduce competition on certain segments and would cause higher prices for the consumers of Southern Europe.

The head of ArcelorMittal Galaţi: "The sale of the plant is not the same as its closing down"

The sale of the plant of Galaţi is not equivalent to its shutdown, and the employees wouldn't have to be affected, as the European Commission (EC) wants to raise the competition level in Europe, not to have production facilities shut down, News.ro, Bruno Ribo the general manager of the ArcelorMittal Galaţi - Skopje group said in an interview with News.ro.

"A potential sale of the Plant is not the same, under no circumstances, as its shut down. The plant is fully functional, perfectly adapted to its natural market, with a strong portfolio of customers, a safe supply chain, with skilled workers and excellent specialists, and has no problems in carrying out any of its legal obligations. It has a significant potential for growth, which makes it even more attractive. Not least, we are attractive given that we are inside the European Union".

In Romania, ArcelorMittal own production facilities in Galaţi, Iaşi, Roman and Hunedoara. According to Bruno Ribo, Arcelor Mittal does not have plans to sell any other units in Romania.

Over the last few years, the ArcelorMittal Galaţi plant has seen a median output of approximately 2 million ons of steel. The metallurgic platform of the plant employs about 7,000 people, of which about 5,500 are employed directly by ArcelorMittal, and 1,500 by other contracting firms.

The sale procedure would take a few months, after the European Commission approves the deal, with the deadline being May 23rd.

The ArcelorMittal group is the biggest metallurgic and mining company in the world, present in over 60 countries, and in 19 of them it has production facilities of its own.

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