European steel giant Arcelor on Friday signed an agreement with
Chinese producer Laiwu Steel Group that will allow Arcelor to hold
a 38.41 percent stake in Laiwu Steel Corporation.
Arcelor will acquire 354,236,546 legal shares from Laiwu Steel
Group at a price of 5.88 yuan (73.5 cents) per share for a total
consideration of 2.086 billion yuan (US$ 260.75 million),according
to the agreement.
The total cash amount is subject to adjustment based on the net
asset value at a date close to the end of the transaction.
"The transaction will deliver synergies and offer future
opportunities for us to further enhance the long-term
competitiveness and shareholder value of Laiwu Steel Corporation,"
said Zhao Yanbin, vice-president of Laiwu Steel Group, at the
signing ceremony in Jinan, capital of East China's
Shandong Province.
The agreement still requires central government approval, Zhao
said.
It also involves the transfer of technology and management
expertise as well as the sharing of commercial resources, according
to Zhao.
Arcelor Senior Executive Vice President Roland Junck said "this
move comes as a result of Arcelor's global long-term growth
strategy."
"This partnership with Laiwu gives us an opportunity to
contribute to the tremendous development potential of China, the
world's largest and fastest growing steel market," Junck said.
For the nine months until Sept. 30, 2005, Laiwu Steel
Corporation's main business revenue reached 14.078 billion yuan
(US$1.76 billion).
Active in the production of long and flat carbon steel products,
Laiwu Steel Group employs a total of 41,000 workers. In 2005, the
Group produced over 10 million tons of steel.
Arcelor is the number one steel company in the world with a
turnover of € 32.6 billion (US$38.8 billion) in 2005, said a press
release on Friday.
Arcelor started negotiations with Chinese steel firms in early
2004, but all of them failed due to its insistence on controlling
shares.
(Xinhua News Agency February 25, 2006)