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Cash Tender Offer to Secure ArcelorMittal’s Position in Brazil

12/07/2007 - ArcelorMittal announces its intention to launch a de-listing cash offer to acquire the 43% outstanding shares in ArcelorMittal Inox Brasil SA that it does not yet own at a price of 100 Brazilian reals per share.

ArcelorMittal recently announced its intention to launch a de-listing cash offer to acquire the 43% outstanding shares in ArcelorMittal Inox Brasil SA that it does not currently own.
 
The company currently owns a 57% stake in ArcelorMittal Inox Brasil, which was formerly known as Acesita. Headquartered in Belo Horizonte, Minas Gerais, the company produces stainless, silicon, and special carbon steels, and also mines iron ore.
 
“This tender is strategically beneficial to ArcelorMittal because it not only reinforces our position in the high growth area of Latin America, but it also strengthens our position in silicon steel, ferritics and specialty stainless steel,” said Lakshmi Mittal, ArcelorMittal’s President and CEO.
 
The company says it will pay 100 Brazilian reals (R$ 100.00) per common share and R$ 100.00 per preferred share of ArcelorMittal Inox Brasil, representing a premium of approximately 22% as compared to the 60-day average preferred share market price. Payment for the shares tendered in the Offer will be made in cash payment and adjusted in connection with any dividends paid by ArcelorMittal Inox Brasil between now and the date of the physical settlement of the Offer.
 
Currently ArcelorMittal owns 96% and 36% of ArcelorMittal Inox Brasil’s total outstanding common and preferred shares respectively.
 
Approximately 1,066,476 common shares and 30,615,489 preferred shares of ArcelorMittal Inox Brasil are eligible to be tendered in the Offer. The deal represents a total value of R$3.2 billion at the Offer price, equivalent to USD 1.75 billion as of December 4, 2007.
 
At the stated price (R$ 100.00 per common share and R$ 100.00 per preferred share), a group of shareholders owning 157,300 common shares and 7,914,147 preferred shares, have committed to ArcelorMittal to sell their shares of ArcelorMittal Inox Brasil in the Offer.
 
ArcelorMittal noted that the request for registration of the Offer is subject to analysis and approval by Brazil’s Securities Commission (CVM) and its features will be subject to adjustment until such registration is obtained. ArcelorMittal has also reserved the right not to proceed with the Offer in the event the CVM requires material modification to the terms and conditions thereof.
 
ArcelorMittal is the world's largest steel company, with 320,000 employees in more than 60 countries. The company leads a number of major global markets, including automotive, construction, household appliances and packaging, with leading R&D and technology, as well as sizeable captive supplies of raw materials and outstanding distribution networks. An industrial presence in 27 European, Asian, African and American countries exposes the company to all the key steel markets, from emerging to mature, positions it will be looking to develop in the high-growth Chinese and Indian markets.
 
ArcelorMittal’s key pro forma financials for 2006 show combined revenues of USD 88.6 billion, with a crude steel production of 118 million tonnes, representing around 10% of world steel output.