ArcelorMittal set to buy Canadian iron ore company for $433 million | world | Hindustan Times
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ArcelorMittal set to buy Canadian iron ore company for $433 million

Unless a rival bidder emerges possibly from China by Monday, ArcelorMittal is set to take over Canada's Baffinland Iron Mines for $433 million. ArcelorMittal has already received a 'no action' letter from Canada's Commissioner of Competition for its bid, clearing the way for its takeover of Baffinland until a rival bid emerges by December 20.

world Updated: Dec 16, 2010 13:06 IST

Unless a rival bidder emerges possibly from China by Monday, ArcelorMittal is set to take over Canada's Baffinland Iron Mines for $433 million.

ArcelorMittal has already received a 'no action' letter from Canada's Commissioner of Competition for its bid, clearing the way for its takeover of Baffinland until a rival bid emerges by December 20.

The 'no action' letter for ArcelorMittal waives the need for a review of the deal by Industry Canada (the industry ministry).

Baffinland Iron Mines is a mining company focused on mineral exploration and development of its fully owned Mary River iron-ore deposits on Baffin Island in the union territory of Nunavut - almost touching Arctic regions.

ArcelorMittal is eying the company's prized Mary River iron-ore deposits to secure future supply for its plants.

A 2008 feasibility study said Mary River's high-grade iron-ore deposits can produce 18 million tonnes of iron ore annually for up to two decades. Recent discoveries hint even bigger deposits.

But to bring the Mary River project into production, Baffinland said to need up to $4 billion.

Before ArcelorMittal's takeover bid, Baffinland held talks with the steel giant to develop Mary River as a joint project.

But a sudden hostile takeover bid in September forced Baffinland's board of directors to enter into a "friendly deal" with ArcelorMittal for $1.10 in cash per share.

However, the "friendly deal" upset Baffinland's CEO Gord McCreary and he quit. Since then, he has been trying to get some Chinese state-owned company to challenge the ArcelorMittal's offer by the Monday deadline.

Baffinland stock shot up 9.73 percent on Wednesday on expectation of its takeover by the world's biggest steel company. The stock closed $1.24, up 9.73 percent on the Toronto Stock Exchange.

ArcelorMittal, which accounts for 8 percent of the global steel output, already has a huge presence in Canada with its mining, steel making and tube manufacturing facilities in the provinces of New Brunswick, Ontario and Quebec.