Chinese regulators stall ArcelorMittal's takeover of Chinese steel firm
04 Aug 2008
Mumbai: Chinese regulators have rejected steel giant ArcelorMittal's plans to acquire a controlling 70 per cent stake in Chinese steel company China Oriental citing anti-trust concerns, media reports said.
ArcelorMittal had instead been told to content with less than 30 per cent stake in the Chinese steelmaker Mittal, even though it had at one time appeared confident of holding more than 70 per cent.
"We may have to accept less than we wanted. If this happens, I will be disappointed. But a stake in the company of 30 per cent or so still is very useful for us," the Financial Times quoted its CEO Lakshmi Mittal as saying.
Chinese regulators, who did not want a foreign company controlling a leading domestic steelmaker, have failed to approve the deal before a 9 May deadline and the bid has been put on hold, a spokesman for the Chinese firm said.
Although Oriental denied talk on ditching the move for a higher stake, this could be a major setback for Lakshmi Mittal's China push.
Oriental, which has its main production plant in northern Hebei province, one of China's richest sources of iron ore, had in December agreed to ArcelorMittal's buying a 73.13 per cent stake in the Hong Kong-listed steel maker in a deal valued at $1 billion.
The Chinese ministry of commerce and the state administration for industry and commerce had six months to approve the transaction since December, but the 9 May deadline passed without a ruling.
