L N Mittal bid: Uttam Galva open offer from Monday

Steel tycoon LN Mittal on Saturday said India has strong demand growth for quality steel that led to ArcelorMittal's stake purchase in Uttam Galva.

In an emailed statement he said, "Since I left india in 1976 it has always been my intention to build an operating presence here and this transaction will give us our first manufacturing presence on the ground."

India continues to be of great interest to ArcelorMittal, not only because it is my home country, but because it has a strong demand growth for quality steel which we believe we can help provide, Mittal noted.

ArcelorMittal on late Friday announced that it wouid launch open offer for the acquisition of 29.4 per cent shares in Uttam Galva, a leading producer of cold rolled steel, galvanized products and colour coated coils and sheets,  on Monday.

The open offer price is Rs 120 a share, which represents a 27 per cent premium over the two weeks volume weighted average and of 85 per cent over the 6 month volume weighted average. The transaction value for 35 per cent stake is Rs 500 crore implying an estimated enterprise value of Rs 2800 crore, the company said in a separate statement.

On 3 September, ArcelorMittal signed a share purchase agreement with the existing promoter R K Miglani family for the acquisition of 5.6 per cent shares in the company. On Friday, it signed a Co-promotion Agreement with R K Miglani family and company to become a co-Promoter.  Subject to 29.4 per cent of shares being tendered in the offer, ArcelorMittal will hold 35 per cent of the equity in Uttam Galva. 

Uttam Galva has its main operating facility in Khopoli near Mumbai and has 1,400 employees.

Sudhir Maheshwari, Member of the Group Management Board of ArcelorMittal, said: "This transaction will provide ArcelorMittal with its first major manufacturing presence in India. The Miglani family has built a highly regarded quality company and we look forward to further developing the company in partnership with them. The Uttam Galva alliance will be an important component of our overall strategy for India, a country where ArcelorMittal aspires to become an integrated producer of the highest quality steel."