ArcelorMittal considers China tie-up

Wednesday, May 07, 2008

London (PTI): NRI steel tycoon-led ArcelorMittal, the world's biggest steel company, has made an unsuccessful bid for 25 per cent stake in China's second-largest steel producer, Angang Steel.

Lakshmi N Mittal, chief executive of ArcelorMittal, informally discussed taking a 25 per cent stake in Angang about two months ago but Angang chairman Zhang Ziaogang turned him down.

However, Zhang has not ruled out an alternative form of partnership.

According to The Daily Telegraph, the talks were part of Mittal's strategy to increase the company's presence in the Chinese steel industry, the world's largest.

Confirming the bid to buy 25 per cent stake in Angang which is worth about 5 billion dollars, Mittal, however, told the Financial Times that "no formal proposal for any kind of joint project involving Angang Steel" has been made.

"However, I had an informal discussion with Zhang about various possibilities. As part of this, I tossed around a number of ideas.

"This is similar to the discussions I have with many steel companies."

Angang is listed on the Hong Kong stock exchange, with a controlling shareholding of 67 per cent owned by Anshan Iron and Steel, a Chinese government company.

Last year, Angang produced 16 million tonnes of steel, putting it in second place behind Baosteel, the industry leader in China with an output of nearly 30 million tonnes annually.

ArcelorMittal currently has a 32 per cent stake in Hunan Valin Tube Steel & Wire, a leading Chinese steelmaker. It also is poised to take control of China Oriental, another China-based steel company, through a series of stockmarket transactions.

Last year ArcelorMittal accounted for 13 per cent of world steel production outside China.

Source: Hindu