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ArcelorMittal To Buy 40 Percent Of G Steel

Europe's ArcelorMittal agreed to buy a 40 percent stake in Thailand's G Steel Public Co. Ltd., expanding the world's largest steel maker's presence in Asia.

LUXEMBOURG -- Europe's ArcelorMittal agreed to buy a 40 percent stake in Thailand's G Steel Public Co. Ltd., expanding the world's largest steel maker's presence in Asia.

ArcelorMittal, based in Luxembourg, said Wednesday that the investment is part of a broader plan to strengthen the finances of G Steel and its subsidiary, GJ Steel Public Company Ltd.

ArcelorMittal said it would immediately provide a $500 million credit facility, which G Steel and GJ steel will use for working capital and other corporate purposes.

The deal will be completed only if G Steel and GJ Steel can reduce their outstanding liabilities, ArcelorMittal said.

The deal indicates ArcelorMittal is ready for more growth after largely halting major investments in 2008 as the global economic downturn caused steel prices to fall.

The company appears poised for rapid expansion this year. It plans to increase by 51 percent its long-term spending such as for equipment and acquisitions to $5.0 billion in 2011 from $3.3 billion in 2010, according to its annual report.

In a statement Wednesday, ArcelorMittal Chief Financial Officer Aditya Mittal called the deal "an important component of our overall emerging markets strategy (that) will provide ArcelorMittal with a major manufacturing presence in Thailand and the ASEAN region, where we expect steel demand to continue growing."

G Steel and GJ steel employ more than 1,400 workers, and can process 2.5 million tons of steel annually at their two slab-rolling facilities in Thailand, ArcelorMittal said. ArcelorMittal shipped 85 million tons of steel and produced 90.6 million tons of crude steel last year, according to its annual report.

The Thai companies' founding shareholders, the Leeswadtrakul family, will remain associated with the companies, AccelorMittal said.

The exact terms of the deal will be determined closer to its completion, ArcelorMittal said. The deal requires approval from regulators and shareholders of the Thai companies.

ArcelorMittal is the product of a 2006 merger between Arcelor and Mittal Steel. Both companies grew quickly by snapping up undervalued steel companies across Europe, North America, Africa and Asia.

ArcelorMittal's U.S. shares rose 28 cents to $36.24 in afternoon trading.
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