Hitachi Metals is under advisement regarding a possible divestment of the Wisconsin-based Waupaca foundry, which may go for around $1bn, according to media reports.
The specialty steelmaker is majority-owned by Japanese conglomerate Hitachi Ltd, and is considering selling its US division after buying Waupaca in 2014 for around $1.3bn in a cash sale from KPS Capital, which purchased the business two years earlier from Thyssenkrupp.
Negotiations are still in preliminary stages and may not result in a deal, according to media reports, because Covid-19 is affecting travel, meetings, and stakeholder confidence.
Neither Hitachi Metals nor Waupaca could not be reached for comment.
Waupaca employs about 4,500 people across seven North American locations, including Indiana, Pennsylvania, Wisconsin, and Tennessee. The company is one of the largest global iron foundries, manufacturing castings for the automotive, construction and oil and gas industries, according to its website.
Hitachi Metals’ foundry business suffered an operating loss during the most recent financial year. Hitachi’s shares have declined by 5.3pc in Japanese trading so far in 2020, and the company is currently valued around $6.1bn.
Hitachi’s net income has declined over the last four financial years. On Jan 30, the company reported an anticipated loss of 47bn yen ($439mn) for the 12-month period ending March 31, 2020.
Hitachi, headquartered in Tokyo, owns approximately 53pc of Hitachi Metals, according to media sources.