Arcelor raises stake in Turkish co, inks US deal
Co paid $869 million to raise its stake in Turkey’s Erdemir to 24.99%. It has also agreed to buy Bayou Steel for $475 million.
By Bloomberg |
LONDON: ArcelorMittal, the world���s biggest steelmaker, is paying a total of $1.3 billion to increase its stake in a Turkish producer and acquire a US manufacturer in a bet the metal���s price will keep rising.
The company paid $869 million to raise its interest in Turkey���s Eregli Demir & Celik Fabrikalari, also known as Erdemir, to 24.99%, Luxembourg-based ArcelorMittal said on Monday in a statement.
It agreed to buy Bayou Steel for $475 million, ArcelorMittal said in a separate statement.
ArcelorMittal is expanding in developing economies to capitalise on booming demand for steel and rising prices. It���s also among companies bidding for US producers as the weak dollar makes exports from the nation���s mills more competitive. ���This shows that ArcelorMittal has its eye on Erdemir and looks like a step towards an acquisition,��� said Kurthan Atmaca, an analyst at Istanbul-based Ekspres Invest. ArcelorMittal dropped as much as e1.56, or 2.5%, to e60.80 and traded at e61.40 at 11:09 am in Amsterdam trading.
The Luxembourg steelmaker said it paid 8.4 liras a share on June 13 to Societe Generale, Nextgen Capital and Credit Suisse International for the Erdemir stake. Erdemir advanced as much as 60 kurus, or 6.9%, to 9.30 liras in Istanbul. Turkey���s biggest steelmaker earlier this month posted a 57% gain in first-quarter profit.
Erdemir, which has plants on Turkey���s Black Sea and Mediterranean coasts and another in Romania, produced 5.4 million tonne of steel last year and plans to invest $4.2 billion by 2012 to increase capacity.
Ordu Yardimlasma Kurumu, or Oyak, an army pension fund, controls Erdemir after buying a 49% stake in the steelmaker from the government for $3 billion in 2005. Oyak chief executive officer Coskun Ulusoy said on June 14 that the fund subsequently increased its stake in Erdemir to over 50%, without giving an exact figure.
Bayou operates from Louisiana and Tennessee. It produced about 510,000 tonne of steel in 2007 and had sales of about $331 million.
The company was acquired in June 2006 by Black Diamond Capital Management for $180 million.
The company paid $869 million to raise its interest in Turkey���s Eregli Demir & Celik Fabrikalari, also known as Erdemir, to 24.99%, Luxembourg-based ArcelorMittal said on Monday in a statement.
It agreed to buy Bayou Steel for $475 million, ArcelorMittal said in a separate statement.
ArcelorMittal is expanding in developing economies to capitalise on booming demand for steel and rising prices. It���s also among companies bidding for US producers as the weak dollar makes exports from the nation���s mills more competitive. ���This shows that ArcelorMittal has its eye on Erdemir and looks like a step towards an acquisition,��� said Kurthan Atmaca, an analyst at Istanbul-based Ekspres Invest. ArcelorMittal dropped as much as e1.56, or 2.5%, to e60.80 and traded at e61.40 at 11:09 am in Amsterdam trading.
The Luxembourg steelmaker said it paid 8.4 liras a share on June 13 to Societe Generale, Nextgen Capital and Credit Suisse International for the Erdemir stake. Erdemir advanced as much as 60 kurus, or 6.9%, to 9.30 liras in Istanbul. Turkey���s biggest steelmaker earlier this month posted a 57% gain in first-quarter profit.
Erdemir, which has plants on Turkey���s Black Sea and Mediterranean coasts and another in Romania, produced 5.4 million tonne of steel last year and plans to invest $4.2 billion by 2012 to increase capacity.
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Ordu Yardimlasma Kurumu, or Oyak, an army pension fund, controls Erdemir after buying a 49% stake in the steelmaker from the government for $3 billion in 2005. Oyak chief executive officer Coskun Ulusoy said on June 14 that the fund subsequently increased its stake in Erdemir to over 50%, without giving an exact figure.
Bayou operates from Louisiana and Tennessee. It produced about 510,000 tonne of steel in 2007 and had sales of about $331 million.
The company was acquired in June 2006 by Black Diamond Capital Management for $180 million.
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