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ArcelorMittal SA Turns Down $1 Billion Acquisition Offer From Networth Investments

Despite recent ownership conversations, ArcelorMittal South Africa has denied a $1 billion buyout offer from Networth Investments, citing its commitment to operational independence.

The Gauteng-based steel firm, which is partially owned by South African businesswoman Noluthando Gosa, declared that the proposal did not match its standards for a legitimate offer.

Networth’s offer attempted to gain a controlling 60% interest in the company, with an additional 2% held by international investors. Networth’s plan aimed to move the company’s production strategy toward higher-margin items, such as stainless steel, rather than its existing low-margin concentration.

Networth CEO Harold Vermaak claimed that South Africa’s steel industry has untapped potential, citing Columbus Stainless as an example of how the sector may be rejuvenated.

Vermaak’s approach included investments in AI automation and green energy, with power coming from Eskom’s Koeberg nuclear plant and a 120MW hydrogen gas facility at Saldanha Bay.

Networth intended to align finance with Indian benchmarks and increase exports of green steel to China. In addition, a Swiss steel trading firm with an annual revenue of €7.1 billion ($7.6 billion) was projected to acquire an offtake arrangement.

The Industrial Development Corporation (IDC) will sell its stake in ArcelorMittal South Africa to Networth for 70%, with any remaining debt to be written off.

Vermaak predicted that consolidating South Africa’s steel assets might boost the national economy by 1.5 percent per year by 2028, while creating long-term jobs.

ArcelorMittal South Africa (Amsa), with a market value of R1.89 billion ($107 million) on the Johannesburg Stock Exchange, is a major player in the economy. Its annual production capability of 7 million metric tons of liquid steel is vital to domestic industry.

Gosa, a non-executive director of Amsa, owns a 6.15 percent share in the company, demonstrating her riches through a diverse investment portfolio.

The company recently profited from the International Trade Administration Commission’s 9% safeguard tax on hot-rolled steel imports, which was implemented to protect domestic manufacturers from international competition.

In 2023, Amsa provided R6.15 billion ($334.7 million) to the government’s coffers, solidifying its position in South Africa’s economy.

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