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| World's number one steel company makes its first acquisition  Arcelor Mittal has announced the acquisition of Sicartsa, a Mexican integrated steel producer, from Grupo Villacero for an enterprise value of $1, 439 million. Sicartsa is a fully integrated producer of long steel, with an annual production capacity of approximately 2.7 million tonnes from its facilities in Mexico and Texas, USA. Through its wholly owned mine, linked directly to the plant via a slurry pipeline, Sicartsa has estimated iron ore reserves of 160 million tonnes, providing 30 years of reserves at current production rates.Arcelor Mittal has also entered into a 50/50 commercial joint-venture with Grupo Villacero for the distribution and trading of Arcelor Mittal long products in Mexico and in the southwest of the United States, capitalizing on Villacero's commercial network. This is Arcelor Mittal's first acquisition since the creation of the company earlier this year. Arcelor Mittal expects this acquisition to generate $80 million of industrial synergies in addition to a further $50 million from commercial, procurement and selling, general & administrative synergies. Sicartsa is sharing its production site with Mittal Steel Lázaro Cárdenas, offering significant synergy potential, once reunited. Prior to the privatization in 1991 which led to its separation in two entities, the Lázaro Cárdenas steelworks operated as one single integrated site producing both flat and long carbon products. Mittal Steel Lázaro Cárdenas is Mexico's largest steel producer and slab exporter. The plant has a capacity of 4 million tons per year. The transaction values Sicartsa at $1,439 million. For 2004, Sicartsa's revenue was $956 million, with an EBITDA of $ 248 million. In addition to the integrated steel making facility at Lázaro Cárdenas, the acquisition also includes Metaver, a mini-mill, Sibasa and Camsa, two rolling mills in Celaya, Guanajuato (Sibasa) and Tultitlán, State of Mexico as well as Border Steel, a mini-mill in Texas, USA. In 2005, Border Steel had net sales of USD 110.8 million and an EBITDA of USD 12.5 million. In 2005 Sicartsa saw a drop in its performance compared to 2004 largely due to a strike of 46 days in 2005. The strike has also affected its operations for another 4 months in 2006. With total annual sales exceeding 2.5 billion USD (2004), Grupo Villacero is the largest distribution and marketing company of steel products in Mexico. write your comments about the article :: © 2006 Construction News :: home page |