BackArcelorMittal plans China Oriental buyout at $1.7 bn
ArcelorMittal plans China Oriental buyout at $1.7 bn
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Hong Kong: ArcelorMittal, world’s largest steel maker, plans to pay at least $1.7 billion (Rs6,706 crore) for all of China Oriental Group’s shares it does not own, boosting its footprint as the world’s top consumer and producer of steel.
ArcelorMittal, which bought a 28.02% stake in the Chinese steel maker for HK$5.02 billion last month, will offer not less than HK$6.12 per China Oriental share, the companies said in a joint statement on 7 December.
That represents a 13% premium to China Oriental’s closing share price of Hong Kong $5.4 each prior to a trading suspension on 7 November.
Hong Kong’s takeovers and mergers panel had ruled that ArcelorMittal and China Oriental’s controlling shareholders had acted in concert and that triggered an unconditional mandatory general offer, China Oriental said.
ArcelorMittal said it intended to keep China Oriental’s listing status. The leading steelmaker also signed an agreement to share technology, technical expertise and know-how with China Oriental with an aim to transform the Chinese firm into a leading producer in the industry in China.
ArcelorMittal would assist China Oriental in sourcing iron ore and coal, they said in the statement. “We have made no secret of our wish to participate more actively in China’s fast-growing steel market, and the agreements we have signed are a major step forward in delivering that strategy," Lakshmi Mittal, chief executive of ArcelorMittal said in the statement.
Mittal said last week that ArcelorMittal was in talks with the company’s controlling shareholders to buy an additional 43% stake, lifting its holding in the Chinese steel maker to 71% from 28%.
He also said he hoped to increase ArcelorMittal’s stakes in other joint ventures with Chinese state-owned steelmakers, even as the government forbids foreign control of major steel companies.
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