SA's Iscor to become part of new Mittal steel empire

sa's iscor to become part of new mittal steel empire

africa's largest steel maker, ispat iscor, will become part of the world number one steel producer after its controlling shareholder, lnm group, announced yesterday that it would merge with its subsidiary, ispat international.

ispat international's simultaneous $4,5bn acquisition of the us's international steel group yesterday helped catapult the former number two group to the top spot. the merged entity, mittal steel, with an estimated $30bn in annual revenues, will be listed on the new york stock exchange and euronext amsterdam.

analysts said yesterday this might mean ispat iscor would have to up the ante in terms of disclosure and transparency in line with strict new york stock exchange standards. consumers have called on the local steel maker for some time to become more transparent, particularly in terms of its pricing.

ispat iscor declined to comment on the prospects of increased disclosure. the company said the formation of mittal steel would not have a direct effect on ispat iscor.

it would, however, enhance the local steel maker's ability to reach global markets in terms of competitive procurement, said spokesman phaldie kalam.

analysts also speculated that the move could mean another name change for the former iscor, which recently changed to ispat iscor when lnm group took control.

lakshmi mittal, the uk's fifth-richest person, will remain at the helm of the new mittal steel, where he will be chairman and ceo. his son, aditya mittal, will be president and group chief financial officer.

mittal steel will be established through a reverse takeover of ispat international by lnm. the merged group will have operations in 14 countries and 165000 employees.

lakshmi mittal said the move was a significant step forward in the globalisation of the steel industry.

it was reported that the md of uk-based steel industry analysis group meps, peter fish, said the merger would increase the group's bargaining power and reduce costs.

ispat international yesterday reported record net income of $460m for the september quarter, compared with a net loss of $10m previously. ispat iscor last week reported a 347% jump in headline earnings for the same period.