ArcelorMittal,Nippon to buy ThyssenKrupp unit for $1.55 bn

ThyssenKrupp has been trying for more than a year and half to find a buyer for its Steel Americas unit.

ThyssenKrupp is selling its US plant to two rivals in a long-awaited deal to help extricate the German steelmaker from an ill-fated boom-year expansion plan,and said it plans to raise up to euro 1 billion ($1.36 billion) in a share sale.

Germanys largest steelmaker,whose empire stretches from shipyards to elevators,said late on Friday it would sell its US steel finishing plant in Calvert,Alabama,to ArcelorMittal and Nippon Steel & Sumitomo Metal Corp for $1.55 billion.

It also said it would increase its capital by as much as 10 per cent in a sale of new shares,which could raise close to euro 1 billion at the current price,to bolster its balance sheet and help reduce a crippling debt burden.

ThyssenKrupp has been trying for more than a year and a half to find a buyer for its Steel Americas unit comprised of the US steel finishing plant and steel slab mill CSA in Brazil which has drained billions from the company for the past few years and been an obstacle to raising fresh funds.

But the sale of the US plant in Calvert is not the coup that ThyssenKrupp Chief Executive Heinrich Hiesinger had initially hoped for. It still leaves the group with its 73 per cent stake in Brazils CSA,which accounted for the bulk of almost euro 13 billion ThyssenKrupp has spent on Steel Americas.

ArcelorMittal and Nippon Steel are financing the purchase,which ArcelorMittal said would yield about $60 million of annual savings,through a combination of equity and debt.

The Calvert plant will sell about half of its production to the North American automotive industry,while the other half will go to the energy sector,where a boom in natural gas exploration has boosted demand for steel pipes and tubes.