BEIJING: Arcelor Mittal, the world's largest steel maker, has agreed to buy a majority stake in a Chinese steel wire firm for $27 million, pending government approval, its China representative said on Thursday.
The firm, Rongcheng Chengshan Steel Cord Co. in Shandong Province, produces about 60,000 tonnes a year of steel tyre cord and bead wire, used to reinforce tyres.
Arcelor Mittal representative Dirk Matthys declined to comment on the size of the stake. A report in the China Business News said the global giant would own 90 per cent of Chengshan Steel Cord.
Arcelor agreed over a year ago to buy a stake in Shandong-based Laiwu Steel Co., China's eighth-largest steel maker, but Beijing has not yet approved the deal. Its steel industry blueprint forbids foreign control of any major steel makers.
Mittal became the only foreign firm to own a direct stake in a major Chinese steel maker, before it merged with Arcelor last year.
Arcelor Mittal owns part of an automotive steel joint venture in Shanghai, and has a stake in a steel wire joint venture, also in Shandong, through another subsidiary.
