Arcelor Mittal Completes Sale of its European Assets to Liberty House

World steel giant Arcelor Mittal has completed the sale of its seven steel making units and five service centers to the Liberty House (which is a part of London-based GFG Alliance) as a part of a divestment package that ArcelorMittal had agreed with the European Commission last year during an investigation into its acquisition of Ilva, in Italy.

The deal has been signed for 740 million Euros and includes integrated steel works at Ostrava in the Czech Republic and Galati in Romania as well as rolling mills at Skopje (North Macedonia), Piombino (Italy), Dudelange (Luxembourg) and two plants near Liege in Belgium. The seven steel sites employ 14,000 people. The five service centres which market the products are based in France and Italy.

The Liberty House said it aims to boost sales from these sites by around 50% over the next three years. Liberty Steel will now work with local management, trade unions, customers and suppliers and complete a comprehensive analysis of the businesses to explore investment opportunities. In the medium term, it will explore opportunities to produce higher-quality steels with a more flexible production profile.

According to Liberty Steel, this is the largest single transaction undertaken by GFG and brings the Alliance's worldwide workforce to nearly 30,000 across 30 counties. Earlier this month, Liberty Steel acquired Johnstown Wire Technologies, North America's largest producer of value-added carbon and alloy wire.

The steel giant, Arcelor Mittal's operations are already struggling amid the tepid steel demand in Europe. Last month the company announced that it will reduce its production in Europe (50% of the total in Q119) due to demand conditions in the market.

Arcelor will cut production in two factories in France and German (Dunkirk and Eisenhuttenstadt, respectively), cut production in Bremen (Germany in Q419 through extending the anticipated maintenance close down of the steelworks, and will also extend the maintenance close down in Asturias expected in Q419.

The company said that company's European operations are being penalised by weak demand conditions in a market as the final safeguard measures, approved on 1 February 2019, failed to uplift the low price environment for several months, as steel purchase contracts are renewed.