ArcelorMittal to buy 35 pc stake in Uttam Galva for Rs 500 cr


ArcelorMittal, which has already entered into pact with Uttam Galva's promoter for acquiring a 5.6 per cent stake, would start an open offer for 29.4 per cent stake in the domestic firm on September 7 at a price of Rs 120 per share.
The steel behemoth said it would become a co-promoter of Uttam Galva.

A late night ArcelorMittal statement said the company entered into a share purchase agreement on September 3 with Uttam Galva's existing promoter R K Miglani family for acquiring 5.6 per cent stake.
"The transaction value for 35 per cent stake is Rs five billion (Rs 500 crore) implying an enterprise value of Rs 28 billion (Rs 2,800 crore)," the statement said.

ArcelorMittal, the steel empire created through a slew of acquisitions worldwide, has signed a "co-promotion agreement with R K Miglani family and company to become a "co-promoter of the company and to obtain broad joint control rights".

"This transaction will provide ArcelorMittal with its first major manufacturing presence in India. The Uttam Galva will be an important component of our overall strategy for India, a country where ArcelorMittal aspires to become an integrated producer of highest quality steel," ArcelorMittal's Group Management Board member Sudhir Maheshwari said.

"Subject to 29.4 per cent of shares being tendered in the offer, ArcelorMittal will hold 35 per cent of the equity in Uttam Galva.
"The completion of both these agreements is subject to customary approvals," the statement said.
Separately, Uttam Galva said its board has approved a "co-promotion agreement" with ArcelorMittal. The existing promoters hold about 40 per cent stake in the company whose current market value is about Rs 1,300 crore.
According to Uttam Galva, ArcelorMittal Netherlands BV, a part of ArcelorMittal, would make the open offer.
If the open offer is not fully subscribed, ArcelorMittal would acquire the shares from the existing promoters to take the shareholdings of the two co-promoters to equal numbers.

Both the promoters would have the rights to nominate equal number of executive directors on the company's board and both the promoters would have veto rights on various matters.
Maharashtra-based Uttam Galva is one of the largest manufacturers of cold-rolled steel and galvanized steel in Western India.
Uttam Galva shares today surged 10 per cent to reach its maximum permissible limit for the day at Rs 113.70 at the BSE. PTI BJ RAM ns MR 09042356 DELHI

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