Metal Products News
- ArcelorMittal says Laiwu deal collapses
Date: 17-Dec-2007 Sources: (Shenzhen Daily)
A PLAN by ArcelorMittal, the world's biggest steelmaker, to buy into Laiwu Steel Co. has fallen apart because China is wary about foreign investment in its strategic industries.
ArcelorMittal said Friday that the parent group of Shanghai-listed Laiwu, one of China's ten biggest steelmakers, had decided not to extend an agreement to sell 38.41 percent of the company to the global steel giant.
'We discussed with the partner to extend the agreement and they have just let us know that they have other priorities and would prefer not to continue with the agreement,'said Dirk Matthys, chief executive of ArcelorMittal in China.
Under the agreement, the deadline for the two companies to receive Chinese regulatory approval and close the deal was Dec. 31 this year.
Two sources close to the situation said that the government had been dragging its feet in approving the sale, mostly because of concern about foreign control of major domestic steel mills.
'ArcelorMittal already has a big stake in Valin and Oriental Group, so regulators do not want them to have a slice of Laiwu. They just held off on it and let the agreement lapse,'one of the sources said.
He was referring to ArcelorMittal's ownership of a third of mid-sized Shenzhen-listed steelmaker Valin Steel Tube & Wire Co., and its recent purchase of a stake in Hong Kong-listed China Oriental Group Co.
On Thursday, ArcelorMittal said it had signed a deal with China Oriental Group's controlling shareholders that would allow it eventually to raise its stake in the Chinese firm to 73.13 percent, from the current 28 percent.
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