China’s Baotou Steel may sell 49% stake to Mittal
Baotou Iron & Steel, one of China’s largest steel makers, is in talks with the world’s top steelmaker, Arcelor Mittal, over the possible sale of 49% stake, the official media reported today.
No other details were provided by the ‘China Daily’ report. In December last year, Mittal Steel had confirmed that it was involved in talks with Baotou Iron & Steel Group.
Baotou Steel Union Company in North China’s Inner Mongolia Autonomous region, a subsidiary of Baotou Iron & Steel Group, plans to pay about 6.97 billion yuan ($882 million) to buy assets from its controlling shareholder to expand, the report said.
The listed steelmaker will offer 3.03 billion new yuan-denominated shares to Baotou Iron & Steel Group at 2.3 yuan (29 US cents) each, the company said yesterday in a statement.
The acquisition will mean that almost the entire group is publicly traded, making it easier for Baotou Steel Union to take over or merge with rivals. China, the world’s biggest steelmaker, is encouraging consolidation in the industry to curb overcapacity and boost competitiveness as its economy expands.
Prior to Mittal Steel’s acquisition of Arcelor, the latter had signed an agreement with Chinese producer Laiwu Steel Group that will allow the European company to hold 38.41% stake in Laiwu Steel Corporation.
Mittal, last year, acquired a 36.67% share in Valin Steel Tube & Wire Company located in central China’s Hunan Province.
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