Indian billionaire Lakshmi Mittal-led ArcelorMittal, the world's biggest steelmaker, has become the first foreign company to acquire controlling stake in a Chinese steel firm -- China Oriental -- in a deal valued at about $1.6 billion (over Rs 6,000 crore).

Hong Kong-listed China Oriental is a holding company for Heibei Jinxi Iron and Steel Company Limited, one of China's largest suppliers of steel billets.

According to a filing with the Hong Kong Stock Exchange, ArcelorMittal acquired 73.13 per cent stake in China Oriental for about Hong Kong $12.2 billion (US $1.6 billion).

ArcelorMittal acquired 820 million shares on November 6, amounting to a 28.02 per cent stake, which it has raised to 2.14 billion shares or a 73.13 per cent stake since then. The two companies are yet to formally announce the change in the controlling shareholding structure of China Oriental, pending the transfer of the shares.

ArcelorMittal said in a statement from Luxembourg that it "is in talks with the controlling shareholders in China Oriental Group Ltd about future co-operation and including increasing its stake in the company."

However, ArcelorMittal confirmed that it owns a 28 per cent stake in COGL. Trading in COGL shares has been suspended since November 7, pending the release of "an announcement which may be price sensitive in nature," the company said in a filing with the exchange.

ArcelorMittal is already present in most of the major steel-producing countries. Mittal has been trying to get a breakthrough in China, but his ambitions have been hampered by the government's prohibitive policy against foreigners owning control of steel firms, terming it has a strategic sector.

However, Mittal succeeded in his latest attempt because COGL is one of the few Chinese steel firms that are privately owned as well as listed outside mainland China.

His attempts to acquire a 38 per cent stake in Laiwu Steel, China's ninth-largest steelmaker, is pending for more than a year for want of some regulatory approvals. Mittal is looking at COGL as the entry point to China, the world's biggest producer as well as consumer of steel.

Founded in 1999, China Oriental went through a management buyout and a capital injection by a foreign strategic partner during 2001-03, and was transformed from a state-owned enterprise to a private company.

COGL is located in Hebei Province, the largest and richest iron ore-producing region of China. The strategic location gives it logistical advantages such as easy access to raw materials and proximity to railways and ports. Its facilities are also close to China's major industrial region where most of its key customers are located.