MT Arcelor Mittal New

By Alex MacDonald

LONDON--Italian steelmaker Acciaieria Arvedi SpA has partnered with Italian state lender Cassa Depositi e Prestiti SpA and Italian businessman Leonardo Del Vecchio to bid for the troubled Ilva steel plant, an Ilva spokesman said Friday, pitting two consortia against each other for control of The Europe's largest steel plant.

The Italian government last year took control of the administration of the loss-making plant in the southern Italian city of Taranto, with a view to saving the plant's roughly 16,000 jobs and improve its pollution record.

Earlier this year it announced plans to sell the flat steel plant, a move that attracted 29 expressions of interest by February. It then asked for formal offers by June 30.

ArcelorMittal, the world's largest steelmaker, said Thursday it had partnered with Italian steelmaker Marcegaglia to make an offer for the plant. It created a consortium called Investco Italy Srl which is 85% owned by Arcelor and 15% owned by Marcegaglia.

Arvedi, which specializes in manufacturing finished flat steel products used in cars and appliances, said it has formed a consortium called AcciaItalia to bid for Ilva. Arvedi said it would be the plant operator with a 22.2% stake while Cassa Depositi and DelFin Sarl, the investment vehicle for the family of Mr. Del Vecchio would own 44.5% and 33.3% stakes respectively.

Ilva is the EU's fourth-largest flat steel producer after ArcelorMittal, Germany's ThyssenKrupp AG, and India's Tata Steel Ltd, accounting for 7% E.U. flat steel production, according to Jefferies. The plant has a production capacity of 9.1 million tons of steel a year but is currently operating at 4.8 million tons a year.

Now the two bids have been received, the Italian government will spend the next 120 days reviewing the environmental aspects of the offers. It will then provide more clarity on the next steps of a multi-stage process that doesn't have a formal end-date.

Write to Alex MacDonald at alex.macdonald@wsj.com

(END) Dow Jones Newswires

July 01, 2016 10:46 ET (14:46 GMT)

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