ArcelorMittal to buy shares in Indian rolled steel maker

ArcelorMittal plans to acquire 29.4% shares in Uttam Galva Steels Ltd, a producer of cold rolled steel, galvanised products (comprising plain and corrugated) and colour coated coils and sheets based in Western India. The price offered in the tender offer is Rs. 120 per share, which represents a 27% premium over the 2 weeks volume weighted average and of 85% over the 6 month volume weighted average. The transaction value for 35% stake is Rs. 5 billion (US$103 million) implying an estimated enterprise value of Rs. 28 billion (US$560 million). On 3 September 2009, ArcelorMittal signed a share purchase agreement with the existing Promoter - R K Miglani family for the acquisition of 5.6% shares in the company. On 4 September 2009, ArcelorMittal signed a co-promotion agreement with R K Miglani family and company in order to become a co-promoter of the company and to obtain broad joint control rights. Subject to 29.4% of shares being tendered in the offer, ArcelorMittal will hold 35% of the equity in Uttam Galva. The completion of both these agreements is subject to customary approvals.ACE 17 Purecontrol FG