ArcelorMittal (MT), the world’s biggest steelmaker, may sell part of its stake in Hunan Valin Steel Co., as it moves to increase its holding in an automotive steel partnership with the Chinese company’s parent, gaining more direct exposure to the world's largest car producer.
ArcelorMittal will raise its ownership in Valin ArcelorMittal Automotive to 49 percent from 33 percent and boost its capital investment by 15 percent to 5.2 billion yuan ($817 million), the company said in a statement dated yesterday. The Luxembourg-based company also concluded a put option agreement that will enable it to sell as much as a 19.9 percent stake, or 600 million shares, in Hunan Valin to Valin Group, reducing its holding to 10.07 percent.
Increasing its stake in the unit will boost ArcelorMittal’s direct share of China's autosteel market. Production capacity at the venture, set to become operational in the first half of 2014, will be increased by 25 percent to 1.5 million tons, ArcelorMittal said today.
“This is a good opportunity to create value for our shareholders and further enhance our participation in both China and the automotive market more broadly,” Sudhir Maheshwari, ArcelorMittal’s group management board member responsible for China, said in the statement.
To contact the reporter on this story: Soraya Permatasari in Melbourne at firstname.lastname@example.org
To contact the editors responsible for this story: Rebecca Keenan at email@example.com; Andrew Hobbs at firstname.lastname@example.org