Tue, Aug 02, 2011 - Page 11 News List

China Steel said to make offer for Lion Group steel assets

Bloomberg

China Steel Corp (中鋼), Taiwan’s largest steelmaker, has offered to buy the steel businesses of Malaysia’s Lion Group, two people with knowledge of the matter said.

China Steel has made a binding offer for Lion Group assets including Amsteel Mills Bhd and Megasteel Bhd, said the people, who declined to be identified because the information is confidential. The deal could be valued at more than US$1 billion, one person said.

China Steel, whose first-quarter profit fell 40 percent as it failed to pass on higher costs, said last week it is evaluating an investment in Megasteel, which is controlled by Lion Group. The comments came after Chinese-language Economic Daily News reported that the company was planning to invest NT$10 billion (US$347 million) in Megasteel.

The Taiwanese company is competing with Baosteel Group Corp, China’s second-biggest steelmaker, which is in discussions to buy the steel assets of Lion Group, according to people with knowledge of the matter.

In June, three units of Lion Group said that they were in talks with various parties regarding possible strategic collaboration.

Lion Corp, Lion Industries Corp and Lion Diversified Holdings Bhd said in separate statements to the Kuala Lumpur stock exchange that discussions were “exploratory.”

“The issue is still under evaluation,” China Steel vice president Steve Lee (李慶超) said in a telephone interview about the possible purchase of Lion Group assets. He declined to comment on whether China Steel had made an offer.

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