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Mittal seeks control of South African steel industry
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The London-based Asian steel magnate, Lakshmi Mittal, is believed to have embarked on a new initiative to gain total control of the South African steel industry by taking control of Iscor.
Mittal is believed to be Britain’s richest person, and is vying to become the world’s largest steel owner. Analysts in South Africa say there is reliable information to confirm that Mittal's LNM Group has made a direct bid for South Africa's second largest steel producer, Highveld Steel and Vanadium Corporation. LNM already holds a 49.9 percent
stake in the country's largest steel producer, the former state-owned Iscor. And he has been awaiting clearance from South Africa's Competitions Board to allow him to take full control of the company.
The competition authorities entered into a Business Assistance Agreement (BAA) with Iscor two years ago, and may take their time to approve Mittal’s request. And since then, LNM has been gradually acquiring additional shares in Iscor as part of the BAA for effecting savings through the provision of improved technologies.
One analyst said that the move to acquire Highveld Steel now, might solely be aimed at avoiding the long delay that may be caused by the required approval for Iscor. And the current attempt to acquire Highveld Steel would also not require LNM to get approval from Iscor shareholders.
A senior analyst working for SA Stockbrokers said that the South African Trade and Industries Department had given broad approval to the consolidation of the South African steel industry. The TID have accepted the argument that you need to be a global player to compete in this global industry. And LNM has huge international steel interests, providing Iscor and others with access to wider markets.
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