ArcelorMittal said on Monday it would cut its stake in Germany-based plate making firm Dillinger Hutte by 17.85 per cent, a deal by which the L N Mittal-led company would earn about $1 billion.
ArcelorMittal has entered into binding agreements to reduce its economic and voting interest in Dillinger Hutte from 51.25 per cent to 33.4 per cent in line with existing governance rights through sale of shares to Struktur-Holding-Stahl GmbH & Co KG aA and Dillinger Hutte Saarstahl AG, a company statement said.
"We have chosen to optimise our stake in Dillinger Hutte in order to bring our economic and voting rights in-line with our existing governance rights in the company. We will continue to be a key industrial partner to Dillinger Hutte," said ArcelorMittal Group Management Board Member Michel Wurth.
Dillinger Hutte enterprise value is estimated to be about $2.6 billion, the statement said and added the combined proceeds from the transaction, comprising sale of shares and the dividend proposed for the year 2008, amount to euro 777 million ($1 billion).
The German firm is one of the leading plate mills in Europe, based in Saarland. The bulk of its production is delivered to the energy sector.
In 2007, Dillinger Hutte shipped approximately 2.3 million tonnes of heavy plate. The company currently employs 5,230 staff.
Last month, ArcelorMittal had announced a job cut scheme aimed to axe as many as 9,000 jobs globally.
The company has had several cross cutting measures such as a 35 per cent output cut amidst decline in demand for steel due to the global economic downturn.