Arcelor Brazil Assets Draw Sale Rumors

Speculation is mounting about the future of ArcelorMittal’s Brazil assets as the global steel powerhouse looks to delever. The firm denies it is looking to sell Brazil units, citing their strategic importance. “There is no truth to the rumors that ArcelorMittal is in discussions to divest our Brazilian assets,” says a spokesman. But chatter among M&A experts – which executives say is based more on speculation than it is on concrete discussion – has been picking up lately as sector specialists consider Arcelor’s alternatives in its efforts to deleverage. Among the most discussed Brazilian assets are ArcelorMittal Tubarao (formerly Cia. Siderurgica Tubarao, or CST), which specializes in flat rolled steel, and ArcelorMittal Inox (formerly Acesita), the stainless steel unit. Bankers covering the company appear convinced Arcelor would avoid parting with CST, its crown jewel in the region, and say if any sale were to make sense it would be of Acesita, though finding a local buyer for a stainless steel unit might be a challenge. There is talk on the ground in Brazil that that China’s Baosteel and Vale may be mulling a bid. Private equity firms in Brazil are adding to the noise surrounding a potential sale, as many seek to acquire quality assets from multinationals at depressed valuations, say bankers.