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| Arcelor Mittal May Have to Offer Higher Price for Laiwu Steel Stake |
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The world's largest steel company Arcelor Mittal will have to offer a higher price of its 38 percent stake in The National Development and Reform Commission said Arcelor had underestimated the value of Laigang Group, the controlling shareholder of Laiwu Steel. "The scheme for equity transfer is so far still under examination by related government authorities," said an unnamed source with Laigang Group, insisting that commission's response is part of normal procedures and confirming that Laiwu Steel is still in talks with Arcelor Mittal. Arcelor China Holdings (Luxemburg) inked the purchase contract with Laigang Group on February 24, 2006 to buy 38.41 percent of Laiwu Steel's equity at 5.888 yuan (about US$0.736) per share. The Shanghai-listed Laiwu Steel closed at 13.34 yuan on Monday. Arcelor will own 37.326 percent of Laiwu Steel according to amendments to the original purchase contract, making the two parties the company's largest shareholders. The two parties signed a supplementary agreement this January to extend the equity purchase contract to September 30, 2007, more than eight months after the submission of the deal to the government authority. Under the NDRC's development policy, the country's top ten producers are expected to produce half of Reports have said that Laigang Group may merge with another steel manufacturer in the region to form a giant company with an annual output of over 20 million tons in east (Xinhua News Agency March 14, 2007)
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