(Corrects first paragraph to say Aperam is Luxembourg-based,
* At least five private equity firms interested
* Unions reject financial investor option, fear job cuts
* EC unlikely to accept sale to Aperam-sources
By Silvia Antonioli
LONDON, Dec 14 Luxembourg-based stainless steel
maker Aperam is interested in buying the ThyssenKrupp
Acciai Speciali Terni plant in Italy, the company said, joining
what sources said was a list of possible bidders.
Others interested in the plant, put up for sale by Finnish
stainless steel maker Outokumpu to gain regulatory
approval for another deal, include JP Morgan's private
equity arm One Equity and Italian steelmaking group Arvedi,
industry sources said.
JP Morgan's buyout arm is one of at least five private
equity firms who have showed interest in buying the plant, but
Italian unions worry that selling the Terni site to a financial
investor will lead to production cuts and job losses.
Outokumpu has committed to sell the Italian mill by May 7 to
gain approval for the acquisition of ThyssenKrupp's
"The plant has to be sold within six months so I think a
private equity buyer is a more likely option. There seems to be
more interest from financial investors than from steelmakers,"
an industry source said.
"There are many private equities for which a 500 million
euros ($646 million) acquisition is not very big, so some of
them are interested."
The Terni site was valued by one analyst at up to $1 billion
about a year ago, but it has lost some of its value due to a
deterioration of economic and market conditions in Europe, some
market players said.
The sale of Italy's biggest stainless steel plant comes at a
sensitive time for the country, as its two largest carbon steel
producers, Ilva and Lucchini, are under threat of closure,
putting at risk up to 30,000 direct and indirect jobs.
The ThyssenKrupp site employees almost 4,000 people directly
and indirectly and makes up for about 20 percent of the GDP of
Umbria, one of the Italian regions worst affected by rising
An Outokumpu spokesman said the company had been approached
by a number of interested parties and it is confident it will be
able to sell the mill within the six month period.
A source, however, said the Finnish producer might ask the
European Commission (EC) for an extension of the period.
ArcelorMittal's stainless steel arm Aperam, Europe's
fourth-largest stainless steel producer after Inoxum-Outokumpu
and Acerinox, said it was looking at the plant, though sources
doubted the EC would allow such a tie-up as potentially
"We will consider this opportunity if it makes sense for the
company from an industrial point of view, but we are cautious
given our conservative financial strategy," an Aperam spokesman
JP Morgan and Italian steelmaker Arvedi declined comment.
Despite reassurances from Outokumpu, Italian unions worry
that the Finnish firm might split up the plant to facilitate the
sale and keep the profitable tubemaking unit, whose main
customer, French exhaust pipe maker Faurecia, supplies
carmakers including Italy's Fiat.
"The tubemaking plant produces 30 percent of the site's
total output; if Outokumpu keeps it for itself it will make it
impossible for a buyer to become a competitive fourth player in
the European stainless steel sector," the Terni secretary of
union Fim Cisl Celestino Tasso said.
"We also don't want a financial investor as they tend to
split up assets, rationalize and then sell them again in pieces
within a few years for quick returns."
Even for an industrial buyer, though, cuts might be
necessary to secure the success of the site, according to some
"Whoever buys Terni, unless it is the Italian state, will
cut production and jobs," one said.
"The overcapacity in the European steel market has to be
fixed and Terni has to make its contribution. The union should
focus on this and understand that, in this climate, if they can
keep 3,500 out 4,000 jobs, it is OK."
The structural overcapacity of stainless steel in Europe has
meant most producers have made losses in recent years, creating
a need for rationalisation and consolidation, which in turn
triggered Outokumpu's acquisition of Inoxum.
($1 = 0.7736 euro)
(Editing by David Holmes and Anthony Barker)