Multinational steelmaker ArcelorMittal said on Jan 29 that it has filed a legal claim for 1.8 billion euros ($2.2 billion) against the Italian state, seeking compensation for losses tied to its investment in Acciaierie d'Italia (ADI). The move comes in direct response to a claim by ADI's government-appointed commissioners who have asked a Milan court to award around 7 billion euros ($8.37 billion) in damages, accusing ArcelorMittal of mismanaging the former ILVA assets.
According to a statement issued by the Luxembourg-headquartered group, ADI's commissioners served ArcelorMittal with a summons to appear in court in Milan. ArcelorMittal said it rejects the allegations contained in that summons, characterising them as lacking both factual and legal merit. The company specifically denied claims that it intentionally ran down the plants, destroyed ADI's business or extracted profits to the detriment of Italy.
ArcelorMittal reiterated that it invested roughly 2 billion euros into the business in an effort to stabilise what it described as a structurally challenged operation. The company said a substantial portion of that spending was dedicated to bringing the plants into compliance with environmental standards mandated by the government.
In its statement, ArcelorMittal accused the Italian government of having committed omissions and of enacting illegitimate legislative interventions. The company argues that those actions undermined the conditions under which it purchased ADI's plants and ultimately led to the loss of its investments.
Operationally, ADI has struggled to sustain production levels amid a combination of high energy costs and weak demand, factors cited in public comments as constraining the business. The government assumed administration of ADI from ArcelorMittal in early 2024, a transition that has since led to competing legal and commercial claims between the parties.
Sources familiar with the matter said in December that the Italian government entered exclusive talks with a U.S. investment fund named Flacks regarding the sale of ADI. Prior to those negotiations, Rome had attempted to sell the steelworks to an Azerbaijani consortium composed of Baku Steel and the Azerbaijan Business Development Fund, but those talks did not produce an agreement.
The ADI dispute is tied to long-standing issues at the ILVA site in Taranto. Once Europe’s largest steel plant, Taranto has been constrained since 2012 by judicial probes and asset seizures related to the environmental impact of its operations. The plant’s uncertain future has become a significant political matter for Prime Minister Giorgia Meloni - the government warns that a shutdown would have broad knock-on effects for Italy’s manufacturing sector.
Currency conversions in the statements used $1 = 0.8357 euros.
Key points
- ArcelorMittal has filed a 1.8 billion euro claim against the Italian government in reaction to a 7 billion euro damages suit from ADI's commissioners - this affects the steel and industrial manufacturing sectors.
- The company states it invested about 2 billion euros to stabilise ADI and meet government-imposed environmental standards, and it blames government omissions and legislative interventions for undermining those investments - this speaks to capital expenditure and regulatory risk.
- ADI's production has been hampered by high energy costs and weak demand, while political and legal issues around the Taranto plant continue to pose wider risks for Italy's manufacturing supply chain.
Risks and uncertainties
- Ongoing litigation - outcomes from the Milan court summons and the related claims could materially affect the financial positions of the parties involved, with implications for creditors and suppliers in the steel sector.
- Regulatory and legislative actions - the dispute highlights the risk that government interventions or legal measures could alter the commercial terms underpinning large industrial transactions, affecting investor recoveries.
- Operational and market pressures - sustained high energy costs and weak demand may continue to constrain ADI's production and profitability, with consequences for regional manufacturing networks.