UK-based GFG Alliance has signed an agreement to acquire Australian mining and steel company Arrium, after submitting an improved offer.
Under the agreement, GFG Alliance will acquire Arrium manufacturing, distribution and recycling, Whyalla steelworks and mining divisions.
Last year, the steelmaker was placed into administration, with advisory and investment firm KordaMentha appointed as deed administrator of the Arrium group companies.
KordaMentha declared a Korean consortium comprising Newlake Alliance Management, JB Asset Management and POSCO as the preferred bidder for the sale process, last month.
KordaMentha restructuring partner and deed administrator Mark Mentha said: “Taking all factors into consideration, including the timeframes required to complete a sale, the administrators and sale advisers Morgan Stanley, decided the GFG Alliance offer was superior to the conditional offer of the Korean consortium with whom we were negotiating.”
Upon completion of the sale, the administrator will focus on finalising returns to creditors, investigations into the affairs of the Arrium Group Companies, and reporting to creditors on the outcome of administration.
GFG Alliance development director Michael Morley said: “Arrium is well-placed to play a significant role in the expected growth in infrastructure spending in Australia over the coming years.
“We are particularly excited by the opportunity for the Whyalla Steelworks to directly supply intermediate steel products to our UK rolling mills that are currently sourced from third parties.”
The closure of the transaction is expected next month and is subject to approval by the Arrium Committee of Creditors and the Foreign Investment Review Board.