Arcelor buys stake in Chinese steelmaker

‘‘This partnership with Laiwu gives us an opportunity to contribute to the tremendous development potential of China; the world’s largest and fastest-growing steel market,’’ he said in a statement. ‘‘The investment in Laiwu Steel Corp will become a key operational platform to better serve our Chinese customers’’.

Laiwu Steel Corp is presently controlled by Laiwu Steel Group Ltd, which will match Arcelor’s 38 per cent stake in the new lineup. Almost 22 per cent of the company will be floated on the Shanghai stock exchange with a 1 per cent stake staying in the hands of the Shandong Economic Development and Investment Co

The deal will need to be cleared by the Chinese authorities, which could take between three to six months. Arcelor first started talking to Laiwu 15 months ago.

Arcelor CEO Guy Dolle said he was also in talks with other Chinese steelmakers about further acquisitions, but declined to identify any of them. ‘‘We’re in discussions with other partners, but they’re at a far less advanced stage than with Laiwu,’’ he said in a conference call. ‘‘I can’t say any more about the way that these discussions might develop in the future. At this stage they are discussions rather than negotiations,’’ he added.

Dolle rejected suggestions that the Laiwu deal strengthens the argument for a tie-up with Mittal. Asked whether the stake would create new potential synergies with Mittal, Dolle replied: ‘‘Frankly, I don’t believe so’’. He added: ‘‘These are not the same products, and the factories are 2,000-3,000 kilometers apart. To be clear, I don’t see that it would create any major synergies in China’’.

Laiwu List Co had an euro 11 million net profit in the first nine months of 2005 and had a euro 1.47 billion turnover during the same period. It produced 7.76 million tons of finished steel in 2005. — AP