South Africa’s state-owned Industrial Development Corporation (IDC) has reached an initial agreement to take over ArcelorMittal South Africa (AMSA) in a deal worth approximately R10 billion, potentially bringing the country’s largest steelmaker under state control.
The proposed transaction includes a cash payment of about R3 billion, with the IDC taking responsibility for approximately R7 billion in debt accumulated by the struggling steel producer.
According to Forbes Billionaires Africa, the parties are aiming to complete the deal by the end of 2026, subject to a shareholder vote and the completion of the necessary processes.
The agreement would represent one of the government’s biggest interventions in South Africa’s industrial sector in recent years, as authorities attempt to preserve domestic steelmaking capacity and protect industries that depend on locally produced steel.
AMSA declined to comment on the negotiations. The IDC said it remained in discussions to find a lasting solution to the steelmaker’s challenges and protect South Africa’s vital steel-manufacturing capabilities.
ArcelorMittal shares surge
News of the proposed agreement sent ArcelorMittal South Africa shares sharply higher on Wednesday, with the share price rising by as much as 21% during trading in Johannesburg.
Despite the jump, the company’s market value stood at approximately R1.3 billion, a fraction of its valuation of around R56 billion in 2007.
The proposed takeover follows years of financial pressure, declining revenue and efforts to rescue a steel industry considered important to South Africa’s manufacturing economy.
AMSA reported a headline loss of R1.49 billion for the six months to June 2026, compared with R1.01 billion in the corresponding period a year earlier. Revenue fell by 30% to R12 billion, while net borrowings stood at approximately R7.9 billion.
The IDC has already provided financial support to the company, including a R1 billion loan in 2024 and a further R1.68 billion in 2025.
Steel plant closures fuel rescue efforts
Negotiations between AMSA, the IDC and government began after the steelmaker announced in November 2023 that it planned to shut its long steel business.
The business produces steel grades used in industries such as automotive manufacturing, mining and construction.
Despite efforts by the IDC and the Department of Trade, Industry and Competition to protect the sector, AMSA has since closed two steel mills and an iron-ore mine.
Production at its Newcastle works in KwaZulu-Natal stopped in November 2025, with the facility placed under care and maintenance. Its Saldanha plant on the Western Cape coast has been closed since 2020, while its Pretoria facilities are also idle.
The company continues to operate its flat steel facility in Vanderbijlpark, south of Johannesburg, which produces steel sheets and other products.
The closures have raised concerns about the future of local steel production, industrial jobs and the availability of steel for downstream manufacturers.
What happens next?
Once the transaction is completed, the IDC intends to conduct a strategic review of AMSA’s operations. It could also seek industrial partners to operate or invest in individual divisions.
An earlier proposal reportedly involved an IDC offer of between R2.8 billion and R3 billion for an 80% stake, with ArcelorMittal retaining the remaining shareholding. That proposal also envisaged restructuring the company and potentially delisting it from the Johannesburg Stock Exchange before a later relisting.
The final ownership structure remains subject to the outcome of negotiations and the transaction process.
One unresolved issue concerns Likamva Resources, AMSA’s black economic empowerment partner. Likamva holds approximately 17% of the company under a 10-year agreement due to expire in early December 2026. People familiar with the talks said it was unlikely to form part of the new ownership structure.
The Competition Commission has also indicated that the transaction must not result in job cuts.
The long steel business employed approximately 3 500 people at its Newcastle and Vereeniging operations before production stopped.
From Iscor to a possible state-owned steelmaker
AMSA was formerly known as Iscor, the state-owned steel producer that came under the control of Indian billionaire Lakshmi Mittal’s LNM Holdings in the early 2000s.
Mittal Steel subsequently merged with Arcelor in 2006 to create ArcelorMittal, one of the world’s largest steel producers. The international group owns approximately two-thirds of its South African subsidiary.
If the proposed takeover is completed, the IDC’s acquisition would mark a significant change in ownership for a company that has played a central role in South Africa’s industrial development.
The immediate challenge will be to stabilise the business, assess the future of its remaining operations and determine whether new investment can restore the country’s steelmaking capacity.
For now, the agreement remains preliminary, with the final transaction and ownership arrangements still to be confirmed.