Metal Products News
- Arcelor China deal in doubt
Date: 28-Nov-2006 Sources: (Xinhua Online)
Arcelor SA's bid for a major stake in China's Laiwu Steel Corp may be blocked by the government over concerns raised by the Luxembourg-based firm's merger with Mittal Steel Co.
The deal is 'likely to be quashed' by the Chinese government because of fears it would threaten domestic mills, the Interfax news service reported Monday. The merger of Arcelor and London-based Mittal Steel Co in July created the world's top steel company.
The Interfax report could not be confirmed by officials at Arcelor and Laiwu Steel.
'I haven't heard this; we are still waiting for approvals,' Monique Vanvi, vice president for Arcelor China, told Shanghai Daily. 'We are still confident. We will give a quick response to any government inquiries regarding the bid.'
Arcelor in February agreed to buy a 38.41 percent stake in Shanghai-listed Laiwu Steel from its state parent for 2.09 billion yuan (266.2 million U.S. dollars). The deal, if approved, would give Arcelor a stake in the listed company that's equal to the ownership held by Laiwu Steel's parent.
An official at Laiwu Steel said the transaction is still in the approval pipeline, and the company hopes it will be wrapped up soon.
Interfax said the deal might have gone through already if the talks between Arcelor and Laiwu had ended well before the Mittal merger, citing an unnamed source at Arcelor.
The fact that the government is still considering the deal 10 months after it was announced signals that the state is taking a cautious attitude toward major foreign ownership in key industrial sectors.
China safeguards steel - considered a pillar industry - by prohibiting foreign companies to take a controlling stake in a domestic mill.
Mittal earlier bought 36.67 percent of Shenzhen-listed Hunan Valin Steel Tube & Wire Co for 338 million dollars, its first acquisition in China.
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