Irving, Texas-based vertically integrated steelmaker Commercial Metals Company (CMC) has announced that its Swiss subsidiary, Commercial Metals International AG (CMI), has submitted a bid to acquire "Zeljezara Split" d.d. Kastel Sucurac (Split), an electric arc furnace rebar mill which also has a wire mesh facility, from the Croatian Privatization Fund.
CMC stated in a press release that CMI is one of six bidders that have submitted bids for Split. Split has approximately 170,000 mt of rebar capacity and 30,000 mt of mesh capacity.
Hanns Zoellner, president of CMC's marketing and distribution segment, stated, "We are very excited about the prospects for Split and look forward to promptly commencing discussions with the Fund to conclude a purchase contract. We know the rebar business as CMC is the 3rd largest manufacturer in the United States and with the experience and success we have enjoyed following the acquisition of a majority interest in CMC Zawiercie, our Polish mill, we are confident we can achieve the same results in Croatia at Split."
Split is the second Croatian steel mill for which CMI has submitted a purchase offer. In February, CMI submitted a bid for Valjaonica Cijevi Sisak (Sisak) pipe mill. This bid and all other bids for Sisak were rejected by the Fund which has requested new bids for Sisak due by April 17, 2007. CMC is reviewing this request in preparation to make another bid for Sisak. Sisak has approximately 70,000 mt of melting capacity and 300,000 mt of tubular manufacturing capacity for its current product line, which includes seamless, welded, and cold processed pipe.
Mr. Zoellner stated in the company's press release, "CMC's marketing group annually markets close to 500,000 metric tons of tubular products globally and has previously sold pipe products produced by Sisak. If our efforts to acquire both Croatian mills are successful, we can see significant synergies in their operations. Our worldwide marketing capability in both product lines should improve results at both facilities. These moves fit our strategy to expand production capability in the key markets of Central and Eastern Europe. The acquisition of Split and Sisak would definitely fit with CMC's strategic objectives."
CMC says that both of these privatization efforts are in preparation for Croatia's anticipated acceptance into the European Union in 2009.