The AM Investco Italy consortium has won the tender offer to take over Italy's troubled steel giant Ilva, the Italian Ministry of Economic Development confirmed officially on Monday, June 5.
On the date in question, Italian industry minister Carlo Calenda signed a decree backing the €1.8 billion offer from the world's largest steelmaker ArcelorMittal and Italian steel group Marcegaglia for Europe's biggest steel plant by output capacity, the ministry said in a statement. AM Investco's plan won against competition from a rival consortium AcciaItalia, led by Indian steel producer Jindal South West (JSW) Group.
The commissioners running Ilva had said last month that the ArcelorMittal consortium had won the bidding, but unions opposed the thousands of layoffs involved in its plan. Under the plan presented by AM Investco Italy, Ilva's total workforce, which besides its main base in Taranto includes two smaller bases near Genoa in northern Italy, will be cut from 14,220 current jobs down to 9,907 by 2018 and to 8,480 by 2023, the ministry said. Up to 4,100 of those to be laid off will be eligible for state unemployment support. AM Investco has said it was open to trying to reduce the number of job losses in the near term, the ministry said.
The next step in the sale process involves the environment ministry examining AM Investco's plans for cleaning up the site. Once the ministry issues its decree approving the deal, expected during autumn this year, the deal must further be approved by the European Union.
Steel production will remain at six million metric tons a year during the clean-up of the site, which judicial authorities seized in 2012 amid allegations its emissions were causing abnormally high cancer rates. The government then put Ilva under extraordinary administration in 2013 and entrusted its management to a board of special commissioners in January 2015.
By 2024, AM Investco aims to have boosted output to the full eight million metric tons Ilva is authorized to produce, the statement said, using three blast furnaces. In addition to the purchase price, the winning consortium is committed to making an investment worth €2.4 billion in technology and environmental improvements.
ArcelorMittal CEO Lakshmi Mittal said in a statement that the company "will work with all interested parties to guarantee Ilva, its workers and the regions where it operates a better, more stable and sustainable future."