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ArcelorMittal to Acquire 28% Interest in China Oriental Group
11/08/2007 - ArcelorMittal enters agreement to acquire 820,119,151 ordinary shares—an approximately 28% equity interest—in China Oriental Group for a total consideration of US$ 647 million.
ArcelorMittal has entered into an agreement to acquire 820,119,151 ordinary shares—an approximately 28% equity interest—in China Oriental Group Co. Ltd. from Smart Triumph Corp. and Ms. Chen Ningning for a total consideration of US$ 647 million.
China Oriental Group manufactures and sells steel products such as billets, strips, H-beams, cold rolled and galvanized strip through its main operating subsidiaries Hebei Jinxi I&S in Hebei, and Foshan Jinxi in Guangdong, P.R. China.
For the year ended December 31, 2006, the group sold approximately 3.75 million tonnes of steel products, and reported revenues of US$1,313 million and EBITDA of US$225 million. For the six month ending in June 2007, the company reported revenues of US$890 million and EBITDA of US$161 million.
The acquisition will make ArcelorMittal the second-largest shareholder of the company. It also enables ArcelorMittal to continue to build its presence in the important and fast growing steel industry in the P.R. China, a country which constitutes a significant part of its corporate strategy.
ArcelorMittal is the world's largest steel company, with 320,000 employees in more than 60 countries. The company leads a number of major global markets, including automotive, construction, household appliances and packaging, with leading R&D and technology, as well as sizeable captive supplies of raw materials and outstanding distribution networks. An industrial presence in 27 European, Asian, African, and American countries exposes the company to key steel markets, from emerging to mature, positions it will be looking to develop in the high-growth Chinese and Indian markets.
ArcelorMittal’s key pro forma financials for 2006 show combined revenues of USD 88.6 billion, with a crude steel production of 118 million tonnes, representing around 10% of world steel output.
