Jindal Steel Raises Bid to €4 Billion for Italian Steelmaker

Indian steel giant Jindal Steel has submitted a revised offer to buy Italy’s ailing steelmaker for about €4 billion. The bid comprises €1 billion for assets and €3 billion in proposed investments to upgrade the company’s flagship steelworks in Taranto. An Italian government led by Prime Minister Giorgia Meloni is expected to select a winning bidder soon; Bedrock Industries and a consortium led by Baku Steel Co. are also competing.

Resurrecting a Troubled Steel Behemoth

Time was when the Italian steelmaker, previously known as Ilva, was among Europe’s largest. But years of controversy and operational challenges had taken a toll. The Taranto site, now under state administration, is operating at a capacity of 2 million tons per year, but at most other production of over 10 million tons per year.

A state-led tender was initiated in search of a new host after the state’s reclaim of steelmaking assets following a dispute with ArcelorMittal. It now seeks a buyer with the resources to pump in capital to restore the plant to its past level of production.

Competitive Bidding

Jindal Steel originally proposed a 2 billion-euro investment that would involve phasing out blast furnaces, building two electric arc furnaces and creating a direct reduced iron (DRI) facility to produce 6 million tons of steel for a year. However, the firm has now doubled its offer, in which the 1 billion euro signing payment consists of: 500 million euros cash and 500 million euros inventories.

The assets had also attracted a last-minute €1 billion bid from rival bidder Baku Steel Co., Italian newspaper Il Messaggero reported. With several bidders vying for the job, the Italian government’s decision in the weeks ahead will shape the destiny of one of Europe’s largest steel plants.