* Says not anti-competitive to keep a struggling plant
* Sources say plant to lose 80-100 mln euros this year
By Silvia Antonioli and Maytaal Angel
LONDON, Oct 22 Finnish stainless steel maker
Outokumpu has asked the European Commission to let it
keep the Italian steel plant the company agreed to sell to gain
approval for its purchase of ThyssenKrupp's Inoxum
The Acciai Speciali Terni plant has been valued at more than
500 million euros ($677 million) by Outokumpu, but is now
expected to sell for less than that due to weakness in the
global steel market.
Two sources familiar with the matter told Reuters that
Terni, one of Europe's biggest and most modern plants, will lose
80-100 million euros this year, and that Outokumpu believes it
is not anti-competitive to keep it under current conditions.
The Terni plant, about 100 km (62 miles) north of Rome, was
valued by one analyst at up to $1 billion over a year ago.
"They have been trying to convince the EU that they should
keep Terni since the market situation has completely changed
from last year - the sector got much worse," an industry expert
Refraining from selling the plant could allow more
flexibility in valuing it, the expert said, leading to a lower
writedown in the company's books.
"On Outokumpu's books they put it at 560 million but
probably it will go at 100-200 million euros," he added.
Outokumpu has twice asked the Commission, which regulates
mergers, acquisitions and competition in the EU, to postpone the
deadline for selling Terni because the company thought the bids
It has now been given until the first quarter of 2014 to
complete the sale, according to a source with knowledge of the
The request not to sell is expected to receive short shrift
"The successful and timely sale of AST (Terni) ... is
essential for the Commission. The Commission is of the view that
the divestiture should occur as soon as possible within the
timeframe foreseen," said Antoine Colombani, spokesman for EU
Competition Commissioner Joaquin Almunia.
The Commission previously said it would appoint a
divestiture trustee to sell AST if Outokumpu failed to find a
buyer, in an effort to allay fears that further delays could
damage the plant.
An Outokumpu spokesman declined to comment, but said the
company would give an update on Nov. 1 in conjunction with its
A consortium led by steelmaker Aperam, a company floated by
ArcelorMittal in 2011, is the only party to make a
binding bid last spring for the plant, and it remains
The other three parties in the race are Taiwan's Yieh United
Steel Corp (YUSCO), one of Asia's largest stainless
steel producers, as well as U.S. private equity funds Apollo and
JP Morgan's One Equity Partners.
If the Commission continues to insist on a sale, Outokumpu
is expected to go into negotiations with one party within the
Workers at Terni and local authorities recently expressed
concern about an extension of the sale process, which could
worsen the situation of the plant in one of Italy's unemployment
The Terni plant employs almost 4,000 people directly and