Mittal’s US plant sale expects to draw big bidders

Mittal Steel, following the order of the US Justice Department to sell its facility in Maryland, is likely to expect bids for the plant in Sparrows Point from big companies in China, Russia and India. The Wall Street Journal has reported that bidders may include JSW Steel Ltd. or Ispat Industries Ltd. both based in India. It further hinted towards Evraz Group and Severstal Group, both are Russian based company which have already operations in the U.S. Mittal’s Sparrows Point mill will draw interest of many leading companies since it is the only integrated steel maker located on a deep-water port and because it recently upgraded to its cold-rolling mill. The Justice department recently ordered Mittal to sell off its Sparrows Point mill near Baltimore as a means of maintaining sufficient competition in the U.S. tin plate market. The newspaper further hinted at China’s Wuhan Steel Corp. and Anshan Iron & Steel Group Corp. as they have enough compilation of cash reserve and are considering expanding as potential buyers. Brazil’s Companhia Siderurgica Nacional may also be interest as it has recently failed in its efforts to acquire Wheeling-Pittsburgh Corp. In the meanwhile, German steel maker ThyssenKrupp AG, which was outbid by Arcelor in the battle for Dofasco, has categorically said that it has no interest in acquiring Arcelor Mittal SA’s Sparrows Point steel mill. The German steelmaker had ealier hoped that the U.S. Justice Department would require Mittal to divest Dofasco, a specialist in high-quality carbon flat steel, following the competition concerns. The recent ruling is obviously frustrating for ThyssenKrupp AG. After Arcelor was itself was taken over by Mittal and, as part of that acquisition bid, Mittal had agreed to flip Dofasco to ThyssenKrupp. However, that agreement was nullified by a Dutch court earlier this year. The integration process of Canada’s largest steel maker Dofasco Inc. in the combined Arcelor Mittal is now likely to gain momentum. In the mean time, in its first presentation of full-year results as a merged company, Arcelor Mittal has reported net income of $7.97bn in 2006. However, this clearly marks a decline of 3.5 percent, from $8.26bn in the previous year, in part due to a higher tax burden.