ArcelorMittal, keen on making its presence
felt in China, is paying $647 million for a 28.1-percent stake
in China Oriental Group Co. Ltd., making it the only Western
steelmaker to own significant stakes in two of the country's
The purchase of the stake in China Oriental
comes about two years after the world's largest steelmaker
bought a stake in Hunan Valin Steel Tube & Wire Ltd., the
listed arm of Hunan Valin Group. It marks the biggest
investment in a major Chinese mill since the government
effectively banned foreign investors from taking majority
control of Chinese steelmakers in 2005.
ArcelorMittal purchased the shares from Smart
Triumph Corp., owned by Chen Ningning, one of China's richest
women, and is now the group's second-largest shareholder.
Hong Kong-listed China Oriental has two steel
plants in Guangdong and Hebei provinces producing billet,
H-beams and hot-rolled, cold-rolled and galvanized strip. Last
year it sold 3.75 million tonnes of steel products, generating
earnings before interest, taxes, depreciation and amortization
of $225 million.
ArcelorMittal owns a 29.2-percent stake in
Hunan Valin Steel Tube and last February agreed to buy a
38-percent stake in Laiwu Iron & Steel Co., although it has
not yet received final government approval for that deal.
Analysts said the purchase of a stake in
China Oriental was only a small step for ArcelorMittal,
although it would strengthen the steelmaker's presence in
"ArcelorMittal has strengthened its existence
in the Chinese steel market with one more investment, although
China Oriental is not a major steel mill in China," an analyst
in Shanghai said. "It should also be good news for China
Oriental, as their second-largest shareholder is the leader in
the global steel industry with advanced production technology,
which will be of great value for its future development."