Mittal fails in deal key to Arcelor takeover nod

NRI billionaire Lakshmi Mittal, who has created an empire through numerous mergers and acquisitions, has failed in a deal that involved selling a plant in order to get necessary regulatory nod for his $35 billion Arcelor takeover.

This is the second time in less than a week that Mittal has announced the termination of a deal. On Friday last week, ArcelorMittal said it would terminate an agreement to acquire China's Laiwu Steel for not getting government approval there.

The company said today in a statement from Luxembourg that it has terminated an agreement for the sale of its Sparrows Point plant and related assets at Baltimore, as the concerned buyer could not secure necessary funding.

ArcelorMittal had announced on August 2 to sell the plant to E2 Acquisition Corp, a joint venture between Esmark and Wheeling Pittsburgh Corp, with a deadline set for November 30, which was later extended to December 11. The deal was estimated to be worth about $1.35 billion (about Rs 5,400 crore).

The US Department of Justice (DoJ) had asked Mittal to sell the said plant to meet Anti-Trust norms. ArcelorMittal today said it would continue to work closely with the DoJ to satisfy the terms of the regulatory framework.

The plant has a production capacity of 3.9 million tons of raw steel a year.

This setback comes within days of Mittal saying he would have to terminate an agreement signed in February 2006 to acquire 38 per cent of Laiwu Steel, and this came just a day after Mittal had reached an agreement to acquire over 73 per cent stake in another Chinese steel firm China Oriental Group.

The China Oriental deal is also subject to approval by the Chinese government, which has been critical of foreigners acquiring controlling stake in the local companies.