ArcelorMittal to acquire Brazilian steelmaking company CSP for $2.2bn
Steel and mining company ArcelorMittal has agreed to acquire Brazilian steelmaking company Companhia Siderurgica do Pecem (CSP) for around $2.2 billion.
Companhia Siderurgica do Pecem produces slabs at its steel factory in Ceará state northeast Brazil. The steel facility has been producing since 2016.
The Brazilian steelmaker operates a blast furnace with a capacity of three million tonnes and has access through conveyors to the Port of Pecém, a deep-water port located 10km from its steel plant.
Companhia Siderurgica do Pecem is said to operate within the first Export Processing Zone of Brazil and benefits from several tax incentives, which include a low corporate income tax rate.
According to ArcelorMittal, the acquisition of the Brazilian steelmaking company will grow its position in the high-growth steel industry in Brazil. It will enable ArcelorMittal to gain from considerable planned third-party investment to develop a clean electricity and green hydrogen hub in Pecém.
Through Companhia Siderurgica do Pecem, the steel producing major will add three million tonnes of what is claimed to be high-quality and cost-competitive slab capacity, with the possibility to supply slab intra-group or to sell into the North and South American markets.
Besides, the deal will enable ArcelorMittal to take up additional expansions, which include an option to add primary steelmaking capacity like direct reduced iron, as well as capacity for steel rolling and finishing.
Aditya Mittal — ArcelorMittal CEO said: “In CSP, we are acquiring a modern, efficient, established and profitable business which further enhances our position in Brazil and adds immediate value to ArcelorMittal.
“There is significant potential to decarbonise the asset given the state of Ceará’s ambition to develop a low-cost green hydrogen hub and the huge potential the region holds for solar and wind power generation.
“CSP produces high-quality slabs and is cost competitive, ensuring its products are competitive domestically and for export. In the short-term we will continue to supply CSP’s existing customer base in North and South America.”
The deal, which is subject to some corporate and regulatory approvals, is likely to close by late 2022.