China Oriental (中國東方集團) said yesterday a takeover of the firm by ArcelorMittal had stalled after Chinese regulators failed to give the green light to the proposed deal in the key steel sector.
China’s anti-trust regulator failed to approve the deal for ArcelorMittal to take a stake of more than 70 percent in Oriental before a May 9 deadline, and the bid had been put on hold, a spokesman for the firm said.
ArcelorMittal chairman Lakshmi Mittal told the Financial Times the Chinese government did not want a foreign steelmaker controlling a leading domestic steel firm, adding he would have to settle for a 30 percent stake.
“We may have to accept less than we wanted,” the Indian billionaire and majority shareholder in ArcelorMittal, the world’s biggest steel producer, was quoted as saying in the report.
“If this happens, I will be disappointed. But a stake in the company of 30 percent or so still is very useful for us,” he told the newspaper.
“We understand they are disappointed because they had been awaiting for the approval but did not obtain it within the time of period they expected,” the China Oriental spokesman said. “But China Oriental and ArcelorMittal have so far never talked about giving up raising the stake.”
ArcelorMittal and Oriental said in December that they had agreed to the Luxembourg-based firm buying a 73.13 percent stake in the Hong Kong-listed steel maker in a deal valued at US$1 billion.
The Chinese Ministry of Commerce and the State Administration for Industry and Commerce had six months to approve the transaction, but the deadline passed without a ruling.
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