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ArcelorMittal to Launch Offer for Outstanding Shares of Acindar

10/03/2007 - In an effort to strengthen its position in Argentina, ArcelorMittal announces its intention to launch a cash offer for the remaining 34.7% of outstanding shares in Acindar, representing a potential total transaction value of AR$1708 million.

In an effort to strengthen its position in Argentina, ArcelorMittal has announced its intention to launch a cash offer to acquire the remaining 34.7% of outstanding shares in Acindar. ArcelorMittal currently owns a 65.3% stake in Acindar.
 
In addition to strengthening its position in Argentina, ArcelorMittal’s offer will also help to reinforce the company’s commitment to enhancing its business in the country. The transaction is strategically beneficial to Acindar as it would become vital to ArcelorMittal’s long products strategy, acting as a platform to grow and seek further opportunities in Latin America.
 
“Latin America is a very important steel market with great potential for further growth and one which we have identified as a key region for expansion,” said Lakshmi N. Mittal, ArcelorMittal’s President and CEO. “This tender offer for Acindar underlines our commitment to the region and demonstrates our desire to strengthen our investment in Argentina. We believe that Acindar will benefit from being a wholly-owned subsidiary of ArcelorMittal and from the benefits of the simplified corporate structure that this transaction brings.”
 
 “Being a member of ArcelorMittal, the world’s leading steel company, brings considerable benefits for Acindar which will be further strengthened by this transaction,” said Arturo Acevedo, CEO of Acindar. “For example, Acindar is in the process of completing a USD150-million capital program that will raise capacity to 1.7 million tonnes. This transaction will assist Acindar in furthering investment plans and increasing its presence in the Latin American market.”
 
As part of its commitment to strengthen Acindar and its position in Argentina, ArcelorMittal is transferring the Acindar shares it currently owns through Arcelor Brasil directly under the parent corporate structure of ArcelorMittal.
 
ArcelorMittal says it intends to offer Acindar shareholders AR$5.75 in cash (equivalent to USD1.83 as of October 1, 2007) for each Acindar share they hold, representing a 19.5% premium over Acindar’s closing stock price on October 1, 2007, and a 38.3% premium over Acindar’s average closing stock price over the past six months. The 34.7% stake corresponds to 296,973,709 shares of Acindar as of September 30th, 2007, and represents a potential total transaction value of AR$1,708 million (equivalent to USD542 million as of October 1, 2007). ArcelorMittal says it intends to fund the transaction entirely with cash.
 
The Offer will be made directly to the shareholders of Acindar by ArcelorMittal’s wholly owned subsidiary ArcelorMittal Spain. Subject to regulatory approval, ArcelorMittal intends to commence the contemplated Offer no later than 4 months from Oct. 1.
 
The Offer will be conditioned upon, among other things, the tender of a majority of the shares not held by ArcelorMittal and its affiliates and a resulting ownership post transaction by ArcelorMittal of at least 90.0% of the outstanding shares of Acindar.
 
JP Morgan is acting as exclusive arranger and dealer manager and Bruchou, Fernandez Madero & Lombardi is acting as legal advisor to ArcelorMittal in connection with the Offer.
 
The authorization to carry out this Offer shall be requested to the Argentine Securities Commission, as per applicable regulations, within the next 10 days. Neither ArcelorMittal Spain nor any of its affiliates has commenced the Offer, and the company notes that the information included in this announcement is subject to further modification.
 
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 all the 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.
 
Acindar, a 65.3%-owned subsidiary of ArcelorMittal, is the largest publicly traded steel company in Argentina. The company has been listed on the Buenos Aires Stock Exchange since 1948.