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Arcelor Mittal expects nod for Laiwu stake soonBy Thomas Kutty Abraham and Kartik Goyal (Bloomberg News )Updated: 2007-03-27 13:34
Arcelor Mittal, the world's largest steelmaker, expects to win regulatory approval to buy a stake in Chinese steelmaker Laiwu Steel Corp in the next two months, strengthening its position in the biggest market for the metal. Laiwu would be Luxembourg-based Arcelor Mittal's second investment in a Chinese steelmaker. The company agreed on March 6 to pay about $148 million to buy new shares and increase its stake in Hunan Valin Steel Tube & Wire Co to 33.3 percent. "We are awaiting the National Development and Reform Commission's approval," CEO Lakshmi Mittal told reporters in New Delhi, India, after a board meeting of the International Iron & Steel Institute. Asked how long that decision might take, he said a "couple of months". China accounts for about a third of global steel output and its production has expanded more than fourfold in a decade. Arcelor Mittal, which makes almost a tenth of the world's steel, has targeted growth in China and India, the two most populous countries. Laiwu Steel Group, the founder of Laiwu Steel Corp, said on January 4 that it was in talks with Arcelor Mittal to extend an agreement to sell 38 percent of its publicly traded unit. Laiwu Steel Group, China's eighth-largest mill, has yet to receive regulatory approval for the sale, Laiwu Steel Corp said in a statement to the Shanghai Stock Exchange. The statement didn't say when the sale agreement expires or the length of the extension being sought. Arcelor Mittal expects to buy half of the government's holding in Laiwu Steel Corp, Mittal said. "It's going to be an equal partnership. It could be only 50 percent of about 74 percent owned by the government," he said. Baotou Iron & Steel Group, another Chinese steelmaker, said on March 6 that it ended talks with Arcelor Mittal on selling a stake, according to Chairman Lin Donglu. Baotou Steel hadn't managed to seal an agreement with Arcelor Mittal and will concentrate on finding a local partner, Lin said. Bloomberg News (China Daily 03/27/2007 page14) (For more biz stories, please visit Industry Updates) |
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