ArcelorMittal in debt-fuelled $1.5bn steel buy

Michael Bow
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STEEL magnate Lakshmi Mittal, the man behind London’s Olympic Park sculpture, yesterday said his firm ArcelorMittal will stump up just $250m (£153m) of equity in a $1.5bn deal to snap up ThyssenKrup’s US steel unit.

The company, which is the world’s biggest steel producer, announced on Friday it had bought the US plant for $1.55bn in a 50/50 joint venture with Japan’s Nippon Steel & Sumitomo Metal Corporation.

Mittal yesterday said the acquisition was being financed with a $1bn of debt split between Nippon and ArcelorMittal and a $258m equity portion from each party.

“The ratio of debt to equity is two to one which implies $1bn of debt on the joint venture,” he said on a conference call.

Mittal added that the deal would not impact the company’s plan to reduce its net debt target from $17bn to $15bn in the longer term. The deal is expected to complete in the second quarter of next year but must first be approved by regulatory authorities.

“We do not anticipate major problems from the antitrust authorities, the Department of Justice, the Department of Commerce,” he said.