ArcelorMittal buy the Brazilian steel company Companhia Siderúrgica do Pecem (CSP) for $2,2 billion. Pending corporate and regulatory approvals, the transaction is expected to be completed by the end of 2022. This was announced by the steel giant at the presentation of the first half results 2022. Meanwhile, a leap forward for Arcelormittal on the Paris list, which extends today's positive performance, with an increase of 5,5%.
CSP produces slabs, large blocks of steel used for the production of sheet metal. The Brazilian state-of-the-art steel plant in the state of Ceará was put into operation in 2016 and produced the first slabs in June of the same year. It operates a blast furnace with a capacity of three million tons and has access via conveyor belts to the port of Pecém, a large 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.
“With the CSP we are acquiring a modern, efficient, established and profitable business that further strengthens our position in Brazil and adds immediate value to ArcelorMittal,” said the group CEO, Aditya Mittal -. There is significant potential for the decarbonisation of the business, given the state of Ceará's ambition to develop a low-cost green hydrogen hub and the enormous potential the region has for solar and wind energy production." .
ArcelorMittal: the advantages of the acquisition of the CSP group
The acquisition brings several “strategic benefits,” explains the industrial giant, including the potential to:
- Expand the Company's position in the rapidly growing Brazilian steel industry.
- Exploit the significant third-party investments foreseen for the creation of a clean electricity and green hydrogen hub in Pecém.
- Add 3 million tonnes of high quality, cost competitive slab capacity, with the ability to supply slabs within the group or to sell slabs in North and South America.
- Enable further expansions by the Company, such as the option to add primary steel production capacity (including direct reduced iron) and rolling and finishing capabilities.
- Acquire over $50 million of identified synergies, including SG&A, procurement and process optimization.
ArcelorMittal's second quarter results
The war in Ukraine and soaring inflation have not spared even the world's second largest steel producer. The Luxembourg company has registered a Net income down 2% in the second half to $3,9 billion, despite a 30% increase in steel selling prices in the first half.
"The conflict has an impact on our growth and adds inflationary pressure which results in a decrease in demand," said the Mittal CEO.
On the other hand, these high prices benefited the group in the first quarter. As a result, in the first six months of 2022, group profit increased by 27% compared to the first half of 2021, to $8 billion.
Il turnover of the group exceeded 22 billion euros (22,5 billion dollars) in the second half, an increase of 14,5%.
