Advertisement

Help
You are here: Rediff Home » India » Business » Report
Search:  Rediff.com The Web
Advertisement
  Discuss this Article   |      Email this Article   |      Print this Article

ArcelorMittal buys majority stake in China Oriental
 
 · My Portfolio  · Live market report  · MF Selector  · Broker tips
Get Business updates:What's this?
Advertisement
December 13, 2007 17:33 IST
The world's largest steel company ArcelorMittal, led by India-born Lakshmi Mittal, on Thursday said it will acquire a majority stake in steel maker China Oriental Group for about 6 billion Hong Kong dollars.

The pact with controlling shareholders would enable the steel giant to raise its equity stake in the Chinese company to 73.13 per cent from existing 28.02 per cent.

ArcelorMittal would make an offer of about 6 billion Hong Kong dollars to buy the shares owned by the controlling shareholders.

The offer price for each share would be around 6.12 Hong Kong dollars, which represents the price at which ArcelorMittal acquired a 28 per cent stake in China Oriental from Chen Ningning in November 2007, it said in a statement.

Moreover, it would offer an amount of 0.235-0.706 Hong Kong dollars per share as part of the cash consideration for a put option granted by ArcelorMittal to the controlling shareholders of China Oriental shares, which was not granted to other shareholders.

Following the shareholders' agreement, ArcelorMittal would purchase the existing 45 per cent stake of controlling shareholders over an agreed time period.

However, the deal is subject to anti-trust clearance by the Ministry of Commerce and the State Administration for Industry and Commerce of the People's Republic of China (PRC).

The controlling shareholders (including Wellbeing Holdings Limited and Chingford Holdings Limited, solely owned by Han Jingyuan, Chairman and Chief Executive Officer of China Oriental), currently own approximately 1,320 million China Oriental shares, which represent an approximate 45 per cent equity interest in the company.

"The purchase of a 28 per cent stake in China Oriental earlier and the signing of the Shareholders' Agreement allow ArcelorMittal to be better positioned to participate in the

attractive growth of the PRC construction steel market and to develop China Oriental into a leading producer of heavy sections, focusing on leadership, quality and sustainability," Lakshmi Mittal said in the statement.

ArcelorMittal added that it intends to maintain China Oriental's listing status after the close of the offer. Earlier this month, the company had entered into a business cooperation agreement with China Oriental to share technologies and technical expertise.


© Copyright 2007 PTI. All rights reserved. Republication or redistribution of PTI content, including by framing or similar means, is expressly prohibited without the prior written consent.
 Email this Article      Print this Article

© 2007 Rediff.com India Limited. All Rights Reserved. Disclaimer | Feedback