Nippon Steel to Buy Arcelormittal’s Stake in China Venture

Nippon Steel Corp. (5401), Japan’s largest steelmaker, agreed to buy ArcelorMittal (MT)’s 12 percent stake in an automotive-steel venture in China as demand for cars rises in the world’s largest market.

The Japanese steelmaker will increase its stake in Baosteel-NSC/Arcelor (BNA) Automotive Co. to 50 percent from 38 percent, Masato Suzuki, a spokesman for Tokyo-based Nippon Steel, said by phone today, without giving the value of the deal. Baoshan Iron & Steel Corp. will retain the remaining 50 percent in the venture. The deal will need approval from Chinese authorities, he said.

Total vehicle deliveries in China will grow about 5 percent this year after surging 32 percent to a record in 2010, according to the China Association of Automobile Manufacturers. Baosteel-NSC/Arcelor, which started production in 2005, has a capacity of 2.2 million tons a year.

“We’ve concluded to buy the stake as we expect stable return from the venture, judging from a further growth in the Chinese auto market,” Suzuki said.

Nippon Steel signed the agreement to buy the stake on June 27, the company said in a statement.

To contact the reporter on this story: Masumi Suga in Tokyo at msuga@bloomberg.net

To contact the editor responsible for this story: Rebecca Keenan at rkeenan5@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.