(chinadaily.com.cn)
Updated: 2007-12-14 09:12

ArcelorMittal, the world's largest steelmaker, declared Thursday that it will make a general offer to shareholders of China Oriental Group Co with no more than 6 billion yuan ($815.22 million) to strengthen it position in the fast growing China market, Bloomberg reported on Thursday.

The Luxembourg-based steel tycoon offered at least HK$6.355 per share for all the China Oriental stakes it doesn't already own, the report quoted a company statement today. After the takeover, ArcelorMittal's stakes in Oriental Group will jump to 73.13 percent from the current 28 percent.

The company said earlier it will provide technology and capital to help boost the Hong Kong listed steel maker's annual capacity by two-thirds to 10 million tons.

"Strengthening our position in the fast-growing Chinese market is one of the important elements in ArcelorMittal's strategy," the report also quoted Lakshmi Mittal, CEO of the company. He plans "to develop China Oriental into a leading producer of heavy sections, focusing on leadership, quality and sustainability," according to the report.

On November 6, ArcelorMittal made an agreement with China Oriental's chairman Han Jingyuan and associates to buy their 45 percent stake. The deal would be effective 18 months after the regulator's antitrust approval, the report said.

Later, ArcelorMittal acquired another 28 percent stake in China Oriental from Chen Ningning, its second largest shareholder.

Given the above moves, Hong Kong's securities regulator ruled that ArcelorMittal and Han Jingyuan had acted in concert and ordered them to make a general offer for China Oriental to the rest shareholders. Furthermore, the offer must not be lower than HK$6.12 a share, the price ArcelorMittal paid for Chen's stakes, according to the report.

The company made a general offer today to buy stock from all China Oriental shareholders for between HK$6.355 and HK$6.826 a share, which is based on the price of previous offers and the value of an option granted to Chen and his associates, the report said.