Dec 7 2007
ArcelorMittal, the world's largest steel company, today announced that it has entered into a Business Cooperation Agreement (the "Business Cooperation Agreement"), with China Oriental Group Company Limited ("China Oriental" or the "Company", stock code: 581) and its subsidiaries (the "Group"). In addition, ArcelorMittal entered into a Shareholders' Agreement with the controlling shareholders of China Oriental regarding their shareholdings in and the management of the Company. The agreements will allow ArcelorMittal strengthen its position in China 's fast growing steel market.
The Business Cooperation Agreement will see ArcelorMittal share technology, technical expertise and know-how with the aim of transforming the Group into a leading producer of heavy sections in China . ArcelorMittal will also assist the Group in sourcing of iron ore and coal.
Commenting, Mr. Lakshmi Mittal, President and CEO of ArcelorMittal, said: "We have made no secret of our wish to participate more actively in the China 's fast growing steel market, and the agreements we have signed are a major step forward in delivering that strategy. Not only will this strengthen our position in China , it will also provide the China Oriental Group with the expertise and experience it needs to become a leading producer of heavy sections in China ." He added: "Part of ArcelorMittal's growth over the years has been through strategic acquisitions and subsequently creating value through active management of the companies acquired. I am confident that these agreements will be further examples of how ArcelorMittal adds value through the provision of technology and technical know how, training, financial management, mergers and acquisitions, supply chain management and marketing as well as sustainable and resource efficient production."
"ArcelorMittal becoming the Company's second largest shareholder and the signing of the Business Cooperation Agreement well reflect its confidence in the potential of China Oriental's operations, as well as in the market in Mainland China . We are delighted to have the world's leading steel company as our strategic partner. I believe with ArcelorMittal's support in steel production technology, its network of worldwide raw material sourcing and financial management expertise, China Oriental can expedite its development and the realization of its plan to become a world-class leading H-section steel production base in the PRC," said Mr. Han Jingyuan, Chairman and Chief Executive Officer of China Oriental.
ArcelorMittal intends to make a general offer for the Company in line with HK Stock Exchange regulation. The offer price will be no less than HK$6.12 per Share, being the price at which a 28.02% stake in China Oriental was purchased by ArcelorMittal from Ms Chen Ningning. In addition, it is the intention of ArcelorMittal to maintain the listing of China Oriental after the close of the general offer.