LONDON (BLOOMBERG) - ArcelorMittal offered to take over Europe's largest steel plant in a joint bid with Marcegaglia SpA.

The world's biggest steelmaker plans to return the three blast furnaces operating at the Ilva works in the Italian city of Taranto to profitability and raise output, ArcelorMittal said in a statement Thursday.

A deal won't undermine ArcelorMittal's balance sheet and will boost its position in the Italian market, it said. It plans to raise Ilva's crude-steel output to more than 6 million metric tons a year by 2020 from about 4.8 million tons.

Ilva has been of the continent's biggest environmental calamities. The Italian government is seeking bidders after taking over administration of the plant last year to save jobs and rectify environmental damage. The works were first put into administration in 2013. Media reports have said an Eregli Demir ve Celik Fabrikalari TAS-led group may bid.

"Ilva has been through some tough times," ArcelorMittal said. "We have carried out extensive due diligence and are satisfied that with targeted investments and a robust plan the plant can be successfully turned around."

Steelmakers have been hurt by falling prices and record exports from China, the biggest supplier, as demand slows in its own economy. Cheaper iron ore, used to make steel, also cut prices. ArcelorMittal was forced to raise US$3 billion (S$4.8 billion) from investors this year to help it weather the crisis and cut debt.