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Mittal Steel in China
By agencies
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Friday, 15 July 2005, 19:30 IST
BEIJING: Mittal Steel Co. has made its first investment in China, purchasing 37 percent share of a State-owned steel mill.
The Chinese government has approved the company's plan to acquire nearly 37 percent stake in the State-owned Valin Iron and Steel Co. Ltd for $338 million, boosting the London-based conglomerate's strategic presence in the world's fastest growing market.
According to an agency, China's State Development and Reform Commission (SDRC) approved the acquisition proposal yesterday, immediately after the State-Owned Assets Administration Commission gave a green light to the deal.
The deal will allow Mittal, the London-based NRI to become the second largest stockholder of Valin Iron and Steel Company, one of the largest steel makers in China, located in central China's Hunan Province, it said.
SDRC decision yesterday literally enables Mittal to purchase 36.67 percent of stocks from Valin Iron and Steel Co. Ltd at a price of $338 million. Valin will hold 37.67 percent of the joint venture's stock.
Company sources said that the transaction is a key milestone for Mittal Steel's business in China and is an integral part of its global strategy.
The State-owned Valin, listed on the Shenzhen Stock Exchange, will hand in 30 percent of its sales to Mittal to the central finance and use the rest money mainly to adjust and upgrade its product mix, the report quoted Valin officials as saying.