July 24, 2018 / 8:34 AM / a year ago

Italy reviews ArcelorMittal deal for Ilva, may annul it: statement

ROME (Reuters) - The Italian government is opening a formal review of ArcelorMittal’s planned takeover of the Ilva steel company and might annul the accord if irregularities are found, Industry Minister Luigi Di Maio said on Tuesday.

FILE PHOTO: The logo of steel factory ArcelorMittal is pictured in Seraing near the Belgian city of Liege, March 10, 2016. REUTERS/Francois Lenoir/File Photo

Steel giant ArcelorMittal agreed last year to buy Ilva, Europe’s largest steelworks which is in state-supervised special administration, and had been due to take charge of the business on July 1.

However, the newly installed government delayed the handover and asked Italy’s anti-corruption watchdog to review the tender, which was drawn up by the previous center-left administration and led to ArcelorMittal being awarded the deal.

“We have an obligation to verify the facts following important, critical issues that have emerged,” Di Maio’s office said in a statement.

“We believe there are the conditions for starting an administrative procedure aimed at the possible cancellation of (the tender),” it added, saying the review would last 30 days.

In the meantime, Di Maio, who is head of the anti-establishment 5-Star Movement, said he would meet ArcelorMittal managers on Wednesday to discuss ways they could improve their original offer for Ilva.

There was no immediate comment from ArcelorMittal.

Under the terms of the 2017 deal, the Luxembourg-based ArcellorMittal said it would pay 1.8 billion euros to acquire Ilva and then invest 1.2 billion to boost productivity and 1.1 billion to curb pollution at the firm’s main Taranto plant.

It has also told unions it plans to reduce the Taranto workforce to around 7,600 from 10,900 now.

Earlier on Tuesday, ArcelorMittal said in a statement it would accept government calls to improve its original proposal for Ilva, but did not go into details. An official close to the talks told Reuters the group would accelerate investments to improve the environmental performance of Taranto.

Ilva has been under state-supervised special administration since 2015 after magistrates said it must be cleaned up or closed.

The previous industry minister, Carlo Calenda, has denied suggestions that the 2017 tender was flawed, pointing to reports by the state auditors’ office which approved the whole process.

Di Maio’s 5-Star Movement campaigned for years to close Ilva, because of long-running environmental concerns. The party emerged as the largest single force in elections in March and subsequently forged a coalition with the far-right League.

Officials in Taranto have said Ilva is losing one million euros a day and warn that unless the ArcelorMittal deal is rapidly sealed, the business will be forced to close, with the lose of 14,000 jobs. 5-Star’s government partner, the League, has said Ilva must stay open for the good of the national economy.

It was the second time in a day that a 5-Star minister had called into question a major business deal. Earlier on Tuesday, the new infrastructure minister denounced an ambitious, transalpine rail link as a waste of public money and said he wanted to re-negotiate the project with neighboring France.

Reporting by Crispian Balmer; Additional reporting by Massimiliano Di Giorgio, Francesco Guarascio and Alberto Sisto; editing by Grant McCool

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