October 07, 2008

China denies approval for ArcelorMittal stake in China Oriental

It is reported that China Oriental Group has said that ArcelorMittal did not gain the antimonopoly approval from relevant departments and the agreement they signed earlier was not effective any more.

According to the agreement two parties signed on December 13th 2007, ArcelorMittal will hold 73.13% shares in China Oriental Group within 6 months till May 9th 2008 if they gained antimonopoly approval from regulatory departments from China.

But till the deadline on May 9th 2008, they gained no approval. People of public relation of China Oriental said stock right transfer was not effective any more. That means ArcelorMittal could not gain holding rights from China Oriental.

Bur ArcelorMittal does not give up hope in holding shares from China Oriental Group. They are steel expecting the approval although the stock right transfer was invalid according the agreement.

As for the failure to acquire China Oriental, analyst of steel industry said the country stipulated that foreign investment in Chinese steel industry will not allowed holding stocks in principle. It is difficult for ArcelorMittal to gain approval from Ministry of Commerce of the People’s Republic of China.

(Sourced from MySteel.net)