ArcelorMittal acquires controlling stake in Chinese steel mill

Mumbai: Billionaire Lakshmi Mittal got the rare opportunity to win a controlling position in a Chinese steelmaker when he raised ArcelorMittal''s stake in China Oriental Group''s Hebei Jinxi Iron & Steel Co to over 73 per cent.

Arcelor Mittal, the world''s largest steel maker, struck a preliminary deal on 9 November with Han Jingyuan, chairman of China Oriental Group, to buy an additional 45.11 per cent stake in the company.

Arcelor Mittal last month bought a 28.02 per cent stake in China Oriental from Chinese steel princess Diana Chen Ningning after she failed to wrestle control of the company from Han.

China Oriental is the Hong Kong-listed holding company of the mainland steelmaker Hebei Jinxi Iron & Steel Co.

Arcelor Mittal, which for years has been trying to buy a larger footprint in the world''s top consumer and producer of steel, is expected to have paid as much as $1.7 billion for the deal.

China of late has been encouraging consolidation of its fragmented and overcrowded steel industry, encouraging mergers as also investments by global players. However, strict controls over foreign ownership have deterred the pace of acquisitions in China.

The state restrictions against foreign control of steelmakers are intended to help bolster the domestic market share of the country''s 10 largest state-owned steelmakers from less than 50 per cent to 70 per cent by 2020.

China Oriental Group''s Hebei Jinxi Iron & Steel Co. is a relatively small, private-sector player in a market dominated by state-owned heavyweights.