ROME, Oct 27 (Reuters) - Italy has asked its sovereign wealth fund to consider investing in the country’s biggest steelworks alongside global steelmaker ArcelorMittal to prevent competition regulators from sinking a deal to rescue the plant, sources said.
The government is keen to safeguard ArcelorMittal’s takeover of the loss-making plant, in the southern city of Taranto, because its collapse could jeopardise more than 10,000 jobs, with general elections due early next year.
The European Commission is concerned ArcelorMittal and its current local bid partner, industrial group Marcegaglia, would become too powerful in the supply of galvanized steel products under their 1.8 billion euros ($2.1 billion) bid for the Ilva plant, said one source familiar with the matter.
Two other sources said the government had asked its sovereign wealth fund, Cassa Depositi e Prestiti (CDP), to consider replacing Marcegaglia in the Am InvestCo bid consortium in an effort to ease those competition concerns.
“The economy ministry has asked CDP to evaluate entering into Am InvestCo because it fears the European Commission will highlight competition problems. CDP is considering this,” one source with knowledge of the situation said.
CDP and Luxembourg-based ArcelorMittal, the world’s largest steelmaker, declined to comment. The Marcegaglia group made no comment. A European Commission spokeswoman declined to comment.
The commission had been due to rule on the offer by Oct. 26 but it extended the deadline to Nov. 13 amid media reports that regulatory concerns might derail the deal for Ilva, Europe’s biggest steel plant by production capacity.
A filing on the European Commission website earlier this month showed that ArcelorMittal had offered concessions to try to allay antitrust concerns, but no details of its proposal were made public.
ArcelorMittal has an 85 percent stake in Am InvestCo, with Marcegaglia holding some 15 percent.
“This is not a formal request (to CDP), but the ministry fears problems with the antitrust. Arcelor is working on it, and CDP could take some or all of the Marcegaglia stake,” said a second source familiar with the ministry’s request. ($1 = 0.8617 euros) (writing by Crispian Balmer, editing by Steve Scherer)