As uncertainty envelops Newcastle and the broader South African landscape concerning ArcelorMittal South Africa’s decision to wind down its Long Steels business, the Industrial Development Corporation (IDC), is actively collaborating with financial advisers to formulate a potential R8.5-billion bid to assume control of ArcelorMittal’s operations in the country.
According to sources privy to the discussions, a successful bid by the IDC, which would involve absorbing existing debt, could conclude nearly two years of negotiations involving the state-owned entity, the Department of Trade, Industry and Competition, and ArcelorMittal South Africa (AMSA).
Furthermore, such a deal could facilitate the entry of international steel companies, as the IDC intends to attract strategic investors to operate the plants, the sources revealed, requesting anonymity due to the confidential nature of the ongoing talks.
The proposed bid, primarily funded by the IDC, aims to settle a loan extended by ArcelorMittal to its South African subsidiary, while also incorporating a cash component, according to two of the sources. Additionally, the IDC, which holds the largest share in AMSA after its parent company, Mittal Steel Co, has entered a six-month agreement with AMSA to conduct due diligence on the business. This agreement is set to expire on Tuesday, 30 September 2025.
Although no final decisions have been reached, and a transaction is not guaranteed, insiders suggest that AMSA is likely to accept the IDC’s offer.
To verify these developments, aimed at safeguarding the company’s future, Newcastillian News contacted both the IDC and AMSA for comment on the multi-billion Rand deal. The IDC did not respond to the query. However, Tami Didiza, AMSA’s Group Manager for Stakeholder Management and Communications, stated, “There are no new developments in this matter to share at this stage. Once there are, we will issue a SENS announcement as required by the JSE.”
In conclusion, the IDC’s potential R8.5-billion bid for ArcelorMittal South Africa’s Long Steels business represents a critical juncture for the company, the local steel industry, and Newcastle’s economy. While the outcome remains uncertain and no final decision has been made, the proposed acquisition could resolve longstanding negotiations, secure the company’s operations, and create opportunities for international investment.
Stakeholders, including employees, investors, and government entities, will be closely monitoring developments as the due diligence period concludes and a definitive path forward emerges.
Is there a new chapter in this story? Or is the book finished? I guess we will know soon enough.
What are your thoughts on this? Let us know below.
Be sure to read, SASSA: Social Grants Will Continue After Postbank Agreement Ends, if you missed it.
FAQs: AMSA acquisition:
The IDC is reportedly considering a R8.5-billion acquisition of ArcelorMittal South Africa’s Long Steels business, including debt absorption and a cash component.
No, the deal has not been finalised. The IDC is still conducting due diligence, and AMSA has stated there are no new developments at this stage.
If successful, the acquisition could safeguard jobs, secure AMSA’s operations, and open doors for international steel investors.
AMSA’s Group Manager for Stakeholder Management and Communications confirmed that no new developments are available and updates will be shared through official JSE announcements.
3 Responses
I have a trongly opinion for people who are staying in Newcastle that there is a lot that needs to be done especially the roads
Closing such a big company will be a huge loss to the economy of Newcastle and South Frica as a whole. IDC should really save this Co.
I fail to understand if AMSA is claiming a loss in profit then why not sell ?obviously there are entities out there that see it as a viable business and can make it work otherwise they would never have extended an offer. AMSA must not hold South Africa hostage and play with people’s lives and livelihoods. Government must force their hand