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Metal Miner

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Europe’s Steel Industry Set for Major Shakeup

  • GFG Alliance is exploring strategic options for Liberty Steel's plants in Belgium, Luxembourg, and Italy.
  • Potential suitors have expressed interest in these assets, leading to a review facilitated by Jefferies.
  • Liberty Steel's Dudelange and Liège plants have faced operational challenges in recent months.
Steel

Via Metal Miner

Liberty Steel recently triggered a review of its downstream flat rolling assets in Western Europe. The firm’s parent company, GFG Alliance, said the potential steel industry shakeup stems from an expression of interest from several interested parties. “The review will evaluate Liberty’s assets in Liège (Belgium), Dudelange (Luxembourg), and Piombino (Italy) and will be facilitated by specialist global investment bankers Jefferies,” the holding company said on May 15.

GFG Alliance noted that the primary objective of the review is to consider options for strategic partnerships through long-term feedstock supply contracts. However, the company confirmed that it would consider all options, including co-investment and divestment in various steel manufacturing entities. A source within the company declined to indicate who potential suitors were or from what country they hailed. (Make sure to see tips in negotiating with mills and service centers across the global steel industry)

Potential Repercussions for the EU Steel Industry

Liberty acquired the Dudelange and Liège assets from ArcelorMittal in 2019. However, a source within Liberty told MetalMiner that the plants have not operated “in the last six to twelve months.” Liberty originally sourced feedstock for the Dudelange and Liège sites from several different sources, including ArcelorMittal. However, the source declined to discuss the reasons for not continuing the agreement further.

The company had also planned to acquire feedstock from Liberty’s Gala?i plant in Romania. However, the source stated that properties from there made them incompatible with the Belgian and Luxembourg sites’ requirements. The facilities can also produce over 2.5 million metric tonnes per year of downstream products, including hot dipped galvanized steel, electro-galvanized steel, cold rolled coil, and tin plate.

The source added that the Italian site, Liberty Steel Magona (earlier known as Piombino), continues to face similar issues, though it continues to operate intermittently. That plant lies in the Tuscany region, about 160 kilometers southwest of Florence, and can produce 630,000 metric tonnes per year of galvanized and pre-painted steel. For production changes and global steel plant operation changes like these which could impact your steel sourcing strategies, sign up for MetalMiner’s weekly newsletter.

Liberty’s 2019 acquisition was part of a divestment package agreement with the European Commission under the merger control acquisition into Ilva. The Liege sites faced bankruptcy and possible sale in mid-2023. According to sources, a prospective loan by regional investment fund Sogepa in 2021 never materialized.

By Christopher Rivituso

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