Thursday, 13 December 2007

ArcelorMittal to by China Oriental Group Co.

The world’s largest steelmaker, ArcelorMittal, agreed to take over China Oriental Group Co. to gain a foothold in the fastest-growing steel market, valuing the company at a minimum of HK$18.6 billion ($2.4 billion or £1.2 billion). ArcelorMittal offered at least HK$6.355 for all the China Oriental shares it doesn't already own and said it plans to raise its stake to 73.13% from 28%.

The takeover may allow Chief Executive Officer of ArcelorMittal, Lakshmi Mittal, to bypass laws that restrict overseas control of steelmakers in an economy that expanded more than 11% in the first three quarters of the year. China has accounted for 65% of global growth in steel production in the past 10 years, and is now four times the size of the U.S. steel industry.

``Strengthening our position in the fast-growing Chinese market is one of the important elements in ArcelorMittal's strategy,'' Mittal said today. “We plan to develop China Oriental into a leading producer of heavy sections, focusing on leadership, quality and sustainability.''

Mittal is however still waiting for approval of his 2006 accord to buy a 38% stake in state-owned Laiwu Steel Corp., after the Chinese government last year tightened scrutiny of acquisitions by overseas companies. ArcelorMittal already holds about 29% stake in Hunan Valin Steel Tube and Wire Co. and has 12% of a Shanghai- based venture with Nippon Steel Corp. and Baoshan Iron & Steel Co. that supplies sheets to the automotive industry.

Hong Kong-listed China Oriental makes billets and strips, producing more than 3 million tons of crude steel a year. It posted a 769 million yuan ($104 million) profit from sales of 6.65 billion yuan for the six months ended June 2007. China Oriental will resume trading in Hong Kong at 2:30 p.m. local time after being suspended since Nov. 7, when they closed at HK$5.40. (source: Bloomsberg) - Merger would not affect ArcelorMittal

The internet search engine, Microsoft, has agreed to buy the privately owned British company, Multimap. Multimap is snapping at the heels of Google, the dominant online mapping service. The deal, understood to be worth slightly above $50 million (£24.4 million) and will further expand Microsoft’s fast-growing footprint in online and mobile advertising.

It will also deliver a $25 million (£12.5 million) windfall to Sean Phelan, the Multimap founder, who owned a majority stake in the business that he founded 12 years ago. Multimap’s 120 staff will share a further $13 million (£6.5 million), with an unnamed angel investor who holds the remaining 25% receiving a similar amount.

Multimap’s consumer-orientated website attracted more than four million unique users in the UK last month. It placed the site second in the British rankings, sandwiched between the market-leading Google Maps, which attracted about 11 million users last month, and Google Earth.

Multimap also operates in the commercial market, where it supplies online maps for websites run by other businesses. Clients include Ford and Royal Mail. The business-to-business service traditionally has delivered the lion’s share of Multimap’s revenues, but the consumer site is growing more quickly, Mr Phelan said.

The company is expected to post revenues of about £12 million this year. It made profits of nearly £900,000 in 2006. (source: Timesonline)

Air One was expected to be named at the preferred bidder for Alitalia by The Italian Government last night. Air One, owned by Carlo Toto, the Italian entrepreneur, faced competition from Air France-KLM. Air One was said to be the preferred bidder partly because it offered an “Italian solution” and partly because Air France-KLM wanted to downsize Milan Malpensa Airport.

Mr Toto said, “Obviously, some think that the Italian solution is the best right now”. However, Anpac, the pilots’ union, said that Air One’s business plan offered “no real European integration for the future Alitalia.”

AP Holding, the parent company of Air One, said that it had the support of four banks – Intesa Sanpaolo, Nomura, Morgan Stanley and Goldman Sachs. Reports said that AP Holding was ready to buy the Government’s 49.9% stake in Alitalia and try to buy out minority shareholders. Air One had guaranteed that it would maintain Alitalia’s two national hubs, at Rome and Milan, and up-grade international routes, with 90 new aircraft for short and medium-haul flights and 20 for long-haul services. It also planned to cut 2,750 jobs in a staff of 19,000. Air France-KLM said that it would cut jobs if its bid was successful.

Alitalia, which has been hit by strikes over restructuring plans and loses €1 million (£719,000) a day, has been trying to find a buyer for nearly a year. Maurizio Prato, the chairman, has indicated that he favours the Air France-KLM offer, but union leaders said that “if Alitalia were to go to a foreign company we would, in effect, be the only big European country not to have a flag carrier”. (source: Timesonline) - Alitalia SpA in sight for Air France-KLM

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