ThyssenKrupp Speeds Up Sale of CSA
- gafiorilli
- Mar 12
- 2 min read
June 25, 2012
By Ivo Ribeiro (Valor Econômico) | São Paulo, June 25, 2012
The German group ThyssenKrupp is set to announce in the coming days the hiring of one or possibly two internationally active investment banks to execute the global sale process of its two steel assets in Brazil and the U.S.—the Companhia Siderúrgica do Atlântico (CSA) in Rio de Janeiro and the Mobile rolling mill in Alabama.
At the beginning of the year, OSF Merchant Banking, a business boutique led by Hans J. Apostel, was hired to evaluate strategic options for the two assets, which had become a problem for the group. After deciding to sell in May, OSF Merchant Banking remained as an advisor for all subsequent steps.
Several global investment banks were invited two weeks ago to submit proposals. According to OSF Merchant Banking, these are "all well-known names". Banks typically involved in such transactions include J.P. Morgan, Goldman Sachs, Deutsche Bank, Lazard, and Morgan Stanley. Once the banks are selected, a digital data room will be made available to interested parties. Qualified investors will have access to financial records of CSA and Mobile, as well as site visits and meetings with the sale coordinators.
On ThyssenKrupp’s side, CFO Guido Kerkhoff is leading the operation, with frequent trips to Brazil. He has been informed that there is strong interest from potential buyers and foresees an "accelerated agenda for this process."
Brazilian steelmaker Companhia Siderúrgica Nacional (CSN) has stated that it will analyze the assets. Market speculation suggests that Gerdau, Nippon Steel, JFE, Hyundai Steel, and Chinese groups such as Baosteel may do the same.
Kerkhoff and ThyssenKrupp’s CEO, Heinrich Hiesinger, were hired a year ago to restructure the group, adjusting its portfolio of assets, which range from steel to auto parts and elevators. Since the two assets are integrated, ThyssenKrupp aims to sell them simultaneously, even if to different buyers. In the steel sector, the company has already exited the stainless steel business, selling the former TKN unit to Finland’s Outokumpu.
The CSA plant, in which Vale holds a 27% stake, and Mobile are part of ThyssenKrupp Steel Americas, created in 2005 and struggling with negative results since operations began in 2010. A series of challenges—from construction delays to rising investment costs—has plagued both projects. The CSA plant alone, with a 5 million-ton annual capacity for semi-finished steel slabs, cost over USD 7 billion.