BRUSSELS, Belgium (AP) — ArcelorMittal, the world's largest steel maker, said Monday it bought 90 percent of Chinese steel wire company Rongcheng Chengshan Steelcord for US$26.6 million (euro18.8 million).
The Shandong-based business, which was privately owned, specializes in steelcord wire and bead wire used for reinforcing vehicle tires. It expects turnover to hit US$71 million (euro50 million) this year.
China is the largest steelcord wire market in the world, supplying the world's largest tire manufacturing base.
ArcelorMittal said the purchase was a sign of its commitment to the broader Chinese steel market.
Meanwhile, the company's bid for mid-sized steelmaker Laiwu Steel Corp., also based in Shandong, has stalled, with Chinese regulators demanding a higher price to let the deal go through, a Laiwu spokesman said in March.
Arcelor SA agreed more than a year ago to buy a 38 percent stake in the Laiwu Steel, for 2 billion yuan (US$258 million; euro196 million). Parent company Laiwu Steel Group would have a matching stake of 38 percent, with most of the remainder to be sold by initial public offering on the Shanghai Stock Exchange.
China is the world's biggest steel producer and consumer, using about a third of all steel produced worldwide. The government is pushing small and medium-sized steelmakers to tie up with larger ones to help improve competitiveness and upgrade technology, but foreign investment in the domestic industry remains limited.
Government policy requires the state to keep a controlling stake in key companies in strategically important industries such as steel, and sales of key state-owned assets to foreigners have raised objections over pricing and other issues.
Laiwu Steel Group is China's biggest maker of steel sections and beams, with annual output of over 10 million tons.
ArcelorMittal has a 33 percent stake in Chinese specialty steelmaker Hunan Valin Steel Tube & Wire Co. and is reportedly in talks with Kunming Iron & Steel Co., the biggest steelmaker in the southwestern province of Yunnan.