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Mittal wins China foothold with $314 mln Valin buy
By siliconindia staff writer
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Friday, 14 January 2005, 20:30 IST
SHANGHAI: Lakshmi Mittal, set to become the world's top steel maker via a multi-billion dollar merger, signed a pact to buy 37.17 percent of the listed arm of China's eighth-largest steel maker for $314 million, the firms said on Friday.
Mittal Steel Co., led by self-made India born, UK based billionaire Lakshmi Mittal, agreed to pick up 656.25 million institutional shares in Hunan Valin Steel Tube & Wire Co. Ltd., which holds most of the production assets of parent Valin Iron & Steel Group.
The deal hands Mittal a much-desired foothold in China, the world's largest producer of steel that also consumes about a quarter of global output.
"It provides us with our first production platform in the world's fastest growing steel market," Lakshmi Mittal was cited as saying in a statement.
The Valin Group - also known as Hualing -- restructured its listed subsidiary in late 2004 to include most of its steel production operations.
The subsidiary's yuan-denominated A shares -- open to select foreign investors -- had jumped 6 percent this week to close at 4.54 yuan on Thursday.
Trading was suspended on Friday as the firms signed the deal.
Chinese crude steel production is projected to grow by 30 million tonnes in 2005, compared with growth of 50 million tonnes last year, analysts say.