ArcelorMittal South Africa end talks with black group

JOHANNESBURG: ArcelorMittal South Africa Ltd, the biggest steelmaker in Africa, ended talks to sell a stake to black investors as the global economic recession and financial crisis made deals less attractive or harder to fund.

It does mean the black economic empowerment talks are off, Sven Lunsche, spokesman for the Vanderbijlpark, South Africa-based company said on phone on Thursday.

In the current global economic crisis any M&A deal is impossible to do. The company is controlled by ArcelorMittal, the biggest steelmaker.

The termination means the steelmaker will take longer to meet South Africas requirements for companies from banks to mines to sell equity to black groups to help make amends for injustices suffered under apartheid, which ended in 1994.

Talks with black investor groups could only resume when markets have stabilized, Lunsche said.

The South African steelmakers shares fell 40 per cent this year to 81.50 rand in Johannesburg as reduced demand forced it to cut output and reduce prices, along with rivals including Nippon Steel Corp. and Posco.

Lunsche could not say whether ArcelorMittal would have increased its stake in the local company as part of the mooted transaction.