Beijing: Baotou Iron and Steel, one of China's largest steel firm, is in talks with the world's top steelmaker, Arcelor Mittal over the possible sale of 49 per cent stake, the official media reported on Friday.
No other details were provided by the China Daily report. In December last year, Mittal Steel had confirmed that it was involved in talks with Baotou Iron and Steel Group Co Ltd.
Prior to Mittal Steel's acquisition of Arcelor, the latter had signed an agreement with Chinese producer Laiwu Steel Group that will allow the European company to hold a 38.41 per cent stake in Laiwu Steel Corporation.
Mittal last year acquired a 36.67 per cent share in Valin Steel Tube and Wire Co Ltd in central China's Hunan Province. Meanwhile, Baotou Steel Union Co in North China's Inner Mongolia Autonomous region, a subsidiary of Baotou Iron and Steel Group, plans to pay about 6.97 billion yuan ($882 million) to buy assets from its controlling shareholder to expand, the report said.
The listed steel-maker will offer 3.03 billion new yuan-denominated shares to Baotou Iron & Steel Group at 2.3 yuan (29 US cents) each, the company said yesterday in a statement.
The acquisition will mean that almost the entire group is publicly traded, making it easier for Baotou Steel Union to take over or merge with rivals. China, the world's biggest steel-maker, is encouraging consolidation in the industry to curb overcapacity and boost competitiveness as its economy expands.
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