South Africa's state-owned Industrial Development Corporation (IDC) has reportedly reached an initial agreement with global steel producer ArcelorMittal to acquire control of its South African subsidiary, ArcelorMittal South Africa (AMSA), in a transaction valued at approximately ZAR 10 billion ($610 million), according to media reports.
The proposed transaction includes a cash payment of approximately ZAR 3 billion ($183 million), while the IDC would assume around ZAR 7 billion ($426 million) of AMSA's debt. The parties are reportedly aiming to complete the transaction by the end of 2026, subject to shareholder approval.
Acquisition would bring South Africa's largest steelmaker under state control
The potential acquisition follows negotiations between ArcelorMittal, the IDC and South African authorities that began in November 2023, when AMSA announced plans to shut down two steel mills producing products used in the country's automotive and mining industries.
The IDC, which already holds a stake in AMSA, has been involved in efforts to address the steelmaker's financial difficulties and preserve domestic steel production.
According to the reports, the proposed transaction would effectively place AMSA under the control of the state-owned development finance institution.
Following completion of the transaction, the IDC is expected to undertake a strategic review of AMSA's operations and may seek industrial partners to operate or invest in individual business units.
Transaction remains subject to final agreements and approvals
The proposed acquisition has not yet been finalized. AMSA has declined to comment on the reported transaction, while the IDC has confirmed that discussions are continuing to find a sustainable solution to the steelmaker's challenges.
The transaction is expected to require shareholder approval and the completion of further procedures before it can be implemented.
