In order to wriggle out of Lakshmi Mittal's £13 billion bid for takeover, Arcelor, the Luxembourg steel maker company, has reportedly hurried through a deal to buy a stake in the Chinese steel maker Laiwu Steel, based in the eastern province of Shandong.
As part of its defence against the Mittal bid, Arcelor is said to have agreed to pay around $225 million for a 38 per cent stake in the Chinese company. But analysts pointed out that Mittal Steel had better growth prospects than Arcelor because of its greater exposure to rapidly expanding developing markets.
Sources said that Arcelor has been in talks with Laiwu Steel for some time but had been awaiting permission to acquire a stake in the business from both regional and national authorities in China.
Later in the week Arcelor has also planned a round of meetings with shareholders to tell them why it is important to remain independent. Its deputy chief executive said the shareholders would be explained that in order to grow and create shareholder value Mittal Steel was needed.