ArcelorMittal to take 35 per cent stake in Uttam Galva

Global steel major ArcelorMittal yesterday signed a co-promotion agreement with Uttam Galva Steels Limited's promoter R K Miglani family by which the company will obtain broad joint control rights in Uttam Galva.

ArcelorMittal yesterday said it is also launching a tender offer on 7 September 2009 for the acquisition of 29.4-per cent stake in Uttam Galva, one of India's leading secondary steel producer, at Rs120 per share.

"This transaction will provide ArcelorMittal with its first major manufacturing presence in India. The Miglani family has built a highly regarded quality company and we look forward to further developing the company in partnership with them,'' said Sudhir Maheshwari, member of the group management board of ArcelorMittal.

On 3 September 2009, ArcelorMittal had signed a share purchase agreement with the Miglanis for the acquisition of 5.6 per cent shares in the company.

Subject to 29.4 per cent of shares being tendered in the offer, ArcelorMittal will hold 35 per cent of the equity in Uttam Galva.

The offer price of Rs120 per share represents a 27-per cent premium over the two weeks volume weighted average and of 85 per cent over the six-month volume weighted average.