ArcelorMittal agrees acquisition of CSP in Brazil
July 28 2022 - 1:00AM
28 July
2022, 07:00
CET
ArcelorMittal (the ‘Company’) today announces it has signed an
agreement with the shareholders of Companhia Siderúrgica do Pecém
(‘CSP’) to acquire CSP for an enterprise value of approximately
$2.2 billion. Transaction closing is subject to certain corporate
and regulatory approvals, including CADE (Brazilian antitrust)
approval which is expected by late 2022.
CSP is a world-class operation, producing high-quality slab at a
globally competitive cost. CSP’s state-of-the-art steel facility in
the state of Ceará in northeast Brazil was commissioned in 2016 and
produced its first slabs in June of that year. It operates a three
million tonne capacity blast furnace and has access via conveyors
to the Port of Pecém, a large scale, deep water port located 10
kilometers from the plant. CSP operates within Brazil’s first
Export Processing Zone, and benefits from various tax incentives
including a low corporate income tax rate.
The acquisition brings several strategic benefits to
ArcelorMittal, including the potential to:
- Expand the Company’s position in the high-growth Brazilian
steel industry.
- Capitalise on the significant planned third-party investment to
form a clean electricity and green hydrogen hub in Pecém.
- Add 3 million tonnes of high-quality and cost-competitive slab
capacity, with the potential to supply slab intra-group or to sell
into North and South America.
- Allow for further expansions by the Company, such as the option
to add primary steelmaking capacity (including direct reduced iron)
and rolling and finishing capacity.
- Capture over $50 million of identified synergies, including
SG&A, procurement and process optimisation.
The state of Ceará has ambitions to develop a low-cost green
hydrogen hub. The Pecém Green Hydrogen Hub, a partnership between
the Pecém Complex and Linde, a leading global industrial gases and
engineering company, is a large-scale green hydrogen project at the
Port of Pecém which is targeting to produce up to 5GW of renewable
energy and 900 kt/y of green hydrogen in a series of phases. The
first phase, which the partnership currently expects to be
completed over the course of the next five years, targets the
construction of 100-150MW of renewable energy capacity.
Commenting, ArcelorMittal CEO Aditya Mittal
said:
“In CSP, we are acquiring a modern, efficient, established and
profitable business which further enhances our position in Brazil
and adds immediate value to ArcelorMittal. There is significant
potential to decarbonise the asset given the state of Ceará’s
ambition to develop a low-cost green hydrogen hub and the huge
potential the region holds for solar and wind power generation.
“CSP produces high-quality slabs and is cost competitive,
ensuring its products are competitive domestically and for export.
In the short-term we will continue to supply CSP’s existing
customer base in North and South America. However, what makes this
acquisition so exciting is the medium to long-term potential and
options it presents. As we continue to develop the downstream
capabilities of our NAFTA and Brazilian businesses over the
medium-term, we have the option for CSP to become an important
intra-group slab supplier. Over the longer-term there is also the
option to significantly increase its slab capacity and add rolling
and finishing capabilities on a low-carbon emissions basis.”
ENDS
About ArcelorMittal
ArcelorMittal is the world's leading steel and
mining company, with a presence in 60 countries and primary
steelmaking facilities in 16 countries. In 2021, ArcelorMittal had
revenues of $76.6 billion and crude steel production of 69.1
million metric tonnes, while iron ore production reached 50.9
million metric tonnes.
Our purpose is to produce ever smarter steels
that have a positive benefit for people and planet. Steels made
using innovative processes which use less energy, emit
significantly less carbon and reduce costs. Steels that are
cleaner, stronger and reusable. Steels for electric vehicles and
renewable energy infrastructure that will support societies as they
transform through this century. With steel at our core, our
inventive people and an entrepreneurial culture at heart, we will
support the world in making that change. This is what we believe it
takes to be the steel company of the future.
ArcelorMittal is listed on the stock exchanges
of New York (MT), Amsterdam (MT), Paris (MT), Luxembourg (MT) and
on the Spanish stock exchanges of Barcelona, Bilbao, Madrid and
Valencia (MTS).
For more information about ArcelorMittal please
visit: http://corporate.arcelormittal.com/
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