ArcelorMittal SA unveils $1.24 billion BEE deal; acquires Imperial Crown for $110 million

African continent's largest steelmaker and part of global steel giant ArcelorMittal Group, ArcelorMittal South Africa Limited yesterday announced a 9-billion rand ($1.24 billion) broad-based black economic empowerment (BEE) transaction with Ayigobi consortium and employee share ownership plan (ESOP) to introduce 26-per cent shareholding into its operations.

Broad-based BBE is a form of economic empowerment initiated by the South African government in response to criticism against the earlier narrow-based BEE to distribute wealth across a broad spectrum of the nation's society as possible.

The deal will broaden and transform the ownership base of ArcelorMittal SA's operating assets by giving away 21-per cent stake in the company to Ayigobi consortium and 5 per cent to ESOP for more than 8,500 of its employees, the company said in a statement.

The transaction will involve the transfer of all of ArcelorMittal SA's assets to a new wholly-owned subsidiary, ArcelorMittal South Africa Operations (OPCO) in return for a 74-per cent stake. The remaining 26-per cent shareholding in OPCO will be held by Ayigobi consortium and ESOP.

The Ayigobi consortium includes additional broad-based groupings in the country and led by Sandile Zungu, executive chairman of Zico, an industrial holdings company. Mabengela Investments led by Duduzane Zuma, son of South African president Jacob Zuma is also a participant in the consortium apart from several other investment groups.

About 25 per cent of the equity of the consortium will be allocated to women, youth groups and new entrants.

ArcelorMittal SA CEO, Nonkululeko Nyembezi-Heita said: ''Introducing broad-based BEE shareholders to our operations has been a priority for ArcelorMittal SA for some time. We started assessing the transaction in 2008, but the global economic downturn made it impossible to implement a suitable transaction structure at that time.''