ThyssenKrupp announces capital increase with deal for Alabama plant

|About: ThyssenKrupp AG ADR (TYEKY)|By:, SA News Editor

ThyssenKrupp (TYEKY, TYEKF) confirms an agreement to sell its troubled Alabama steel plant to a joint venture formed by ArcelorMittal (MT) and Nippon Steel & Sumitomo Metal for $1.55B. (earlier)

The German steelmaker says it would increase its capital by as much as 10% in the deal, excluding subscription rights, which would raise close to €1B ($1.36B) at its current share price.

Thyssen still is stuck with its 73% stake in Brazil's CSA, which it also had wanted to sell, but the deal includes a six-year agreement for the U.S. plant to buy 2M tons/year of steel slab from CSA, or 40% of the Brazilian mill's capacity; the arrangement should mean a drop in raw steel imports into the U.S. and less downward pressure on prices.

"There'll be a psychological impact, and that will probably stop price erosion, and then you'll see a long-term impact six and nine months from now," the publisher of Steel Market Update tells WSJ.