After signing a memorandum of understanding (MoU) for picking up a majority stake in Corus’ Teesside Cast Products (TCP), Italian steel maker Marcegaglia may explore further synergies with Tata Steel.
Speaking to Business Standard, Antonio Marcegaglia, chief executive officer of Marcegaglia, said, “We have a historical relationship with Tata Steel, spanning more than 20 years, and it is logical that we explore synergies with them in the future.” Marcegaglia had announced its interest in making a major investment in India about a year ago.
Marcegaglia is going slow on its India plans and would revisit at an appropriate time. “We recognise India as an important market,” he said.
However, Antonio Marcegaglia clarified that the priority currently is its investment in TCP. Sources close to the development said, according to the MoU signed for the TCP sale, Marcegaglia would have a 56 per cent, South Korea’s Dongkuk would have a 24 per cent stake while the remaining 20 per cent would be with Corus.
Marcegaglia and Dongkuk would undertake due diligence with a view to finalising an acquisition agreement. TCP has a slab-making capacity of around 4.7 million tonnes.
Marcegaglia explained that the acquisition would secure the future of the plant. Corus’ move to dilute its holding on TCP was part of its restructuring initiative to improve its competitiveness.
Both Marcegaglia and Dongkuk are part of the four-member consortium that has a slab offtake agreement with Corus. The other members are Alvory SA and Duferco Participations Holding, and would continue as offtakers. Corus would continue with its 20 per cent stake.
Marcegaglia said, synergies in additional facilities with Tata Steel could be explored even in Europe in the long products segment.
Marcegaglia processes five million tonnes of steel.
