India's LARGEST EVER political poll. Have you participated yet?
  • search

Arcelor in China deal, silent on Mittal moves

By Staff
Subscribe to Oneindia News

PARIS, Feb 24 (Reuters) European steel group Arcelor signed a deal to take a stake in a Chinese steelmaker on Friday but Chief Executive Guy Dolle said this was unrelated to the billion takeover offer by Mittal Steel Co.

Dolle said he and his board colleagues would start visiting investors next week to convince them to stay with Arcelor and not accept the unsolicited Mittal cash-and-shares bid, which has still not officially been launched.

''I am confident that I can convince them,'' Dolle told a telephone news conference on the deal to take a stake in China's Laiwu Steel Corp., a unit of Laiwu Steel Group Ltd.

Asked to detail his strategic plan in response to the bid, he said, ''allow me to inform the shareholders first.'' Lakshmi Mittal, head of Mittal Steel, is due to meet French Finance Minister Thierry Breton on Monday to try to convince him of the merits of his bid for Arcelor.

World Trade Organisation chief Pascal Lamy said France must get used to foreign takeover bids from countries such as India, following French protests over a bid by the Indian-born steel magnate for Arcelor.

''These are operations of a new type,'' Lamy told Le Monde daily in an interview. ''When it's Europeans launching these kind of offers, they don't see any novelty in it. When it's the Americans investing it seems normal. But when it is the Chinese or Indians, it's almost abnormal for public opinion,'' he said.

Dolle on Thursday called on governments to calm down after politicians in France, Luxembourg and Spain had voiced their worries about possible Arcelor job cuts.

Arcelor meanwhile received public support from the head of Credit Agricole, France's biggest retail bank and one of its investment advisers. ''We are Arcelor's number one creditor. We are among the bankers defending Arcelor. We will do all we can (to help Arcelor),'' Rene Carron told Europe 1 radio.

CHINA Arcelor agreed with Laiwu to buy a 38.41 per cent stake in the Chinese company. Arcelor said it would pay a total of 2.085 billion yuan (9.2 million) for the stake.

Completion of the deal is subject to regulatory and governmental approvals, the Luxembourg-based group said.

Dolle told the conference call he expected it to take another three to six months for the deal to be completed.

''This deal still needs to be approved by the central Chinese administration, as is usual, and we think this will take between three and six months,'' he said, adding he expected a parallel deal with Laiwu Steel Group unit Yinshan to be concluded before the end of 2007.

Over the 2004 to 2020 period, 60 per cent of the worldwide steel demand growth will come from China and it will represent 30 to 40 per cent of global steel consumption.

China is now turning from a net importer to self sufficiency in steel production.

Dolle said discussions with Laiwu had started long before Mittal announced his takeover proposal in late January, and he rejected suggestions Arcelor would speed up alliance deals to fend off the bid. ''No, for us it is business as usual.'' He said, however, that Arcelor was in discussions with other Chinese partners about deals and would also restart talks with Turkey's Oyak about the Erdemir steel group.

Oyak on Wednesday ended a partnership deal with Arcelor for the privatisation of Erdemir, citing regulatory issues and time constraints, and will now acquire Erdemir on its own.

Dolle said Arcelor was still interested in increasing its stake in Erdemir from the current five per cent.

REUTERS SD PM1908

For Breaking News from Oneindia
Get instant news updates throughout the day.

X
We use cookies to ensure that we give you the best experience on our website. This includes cookies from third party social media websites and ad networks. Such third party cookies may track your use on Oneindia sites for better rendering. Our partners use cookies to ensure we show you advertising that is relevant to you. If you continue without changing your settings, we'll assume that you are happy to receive all cookies on Oneindia website. However, you can change your cookie settings at any time. Learn more