Steel company ArcelorMittal has entered into an agreement with China Oriental Group Company Limited to share technology, technical expertise and know-how with the aim of transforming China Oriental into a leading producer of heavy sections in China and to assist the company in sourcing of iron ore and coal.
Lakshmi Mittal, President and CEO of ArcelorMittal, said, "We have made no secret of our wish to participate more actively in the China's fast growing steel market, and the agreements we have signed are a major step forward in delivering that strategy. Not only will this strengthen our position in China, it will also provide the China Oriental Group with the expertise and experience it needs to become a leading producer of heavy sections in China." He added: "Part of ArcelorMittal's growth over the years has been through strategic acquisitions and subsequently creating value through active management of the companies acquired. I am confident that these agreements will be further examples of how ArcelorMittal adds value through the provision of technology and technical know how, training, financial management, mergers and acquisitions, supply chain management and marketing as well as sustainable and resource efficient production."
ArcelorMittal says it intends to make a general offer for the China Oriental in line with Hong Kong Stock Exchange regulation. The offer price will be no less than HK$6.12 per share, being the price at which a 28.02% stake in China Oriental was purchased by ArcelorMittal from MChen Ningning. In addition, it is the intention of ArcelorMittal to maintain the listing of China Oriental after the close of the general offer.
ArcelorMittal is the world's number one steel company, with 320,000 employees in more than 60 countries. The company brings together the world's number one and number two steel companies, Arcelor and Mittal Steel.
Listed on March 2, 2004, the China Oriental says it is one of China's most efficient iron and steel producers. China Oriental's production plant is located in Hebei Province, which is one of the provinces with the richest iron ore reserves in China, and with close proximity to deep-water ports and railways.