Arcelor Mittal almost buys out its Brazil arm for $5.4 billion

Mumbai: Arcelor Mittal, the world''s largest steelmaker, has acquired 191.3 million outstanding shares, or 90 per cent of the minority shares, in its Brazilian arm - Arcelor Brasil - from other shareholders, bringing the company''s stake to 96.6 per cent.

Rotterdam-based Arcelor Mittal said it would pay $3.699 billion plus 27 million shares for the tendered shares, representing a total price of $5.412 billion (10.3 billion reais) to raise its stake from the previous 67.1 per cent. Shareholders outside the US would be able to choose an all-cash offer or a combination of 10.82 reais plus 0.3568 common shares of the parent company, it said in a statement.

The sell-out right for shareholders who decided not to tender their shares will start on June 5 and end on September 4, in accordance with Brazilian financial markets regulations.

Arcelor Mittal said it intended to redeem all the remaining shares through a tender squeeze-out process since the free float now represent less than 5 per cent of the share capital of Arcelor Brasil.

The steel group had earlier said it would delist Arcelor Brasil if it acquired two-thirds or more of its free float.

Arcelor Mittal paid 62 per cent more than its initial bid after Brazil''s CVM securities regulator ordered it to increase its offer as part of Mittal Steel Co.''s $35.9 billion acquisition of Arcelor SA. The regulator said the company''s original offer of 33.3 reais a share was too low.