Chesterton Tribune                                                                                   Adv.

ArcelorMittal to buy Canada’s Baffinland for $432M

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BRUSSELS(AP) — ArcelorMittal SA said Monday it has agreed to buy Canada-based Baffinland Iron Mines Corp. for 433 million Canadian dollars ($431.6 million), as the world’s largest steel maker seeks to build up its own iron ore reserves.

Baffinland’s board of directors has recommended the C$1.10-per-share offer to its shareholders, Arcelor said in a statement. The miner’s directors and officers, as well as its largest shareholder Resource Capital Funds, have agreed to sell the stock they own in the company.

Arcelor’s offer tops an unsolicited bid by Nunavut Iron Ore Acquisition Inc. made on Sept. 22. It represents a 15.8 percent premium over Baffinland’s closing share price Friday.

Luxembourg-based Arcelor has been building up its iron ore reserves as it seeks to protect itself against price increases in the metal, which is a key raw material for steel.

The world’s three biggest iron ore suppliers earlier this year decided to price their contracts on a quarterly basis rather than an annual one, making steel producers more vulnerable to sudden prices changes.

Baffinland focuses on mining iron ore from its Mary River property in Nunavut Territory in northwestern Canada, which it says has 365 million tons of proven and probably iron reserves.

“The offer is in line with ArcelorMittal’s strategy of expanding its mining portfolio and selectively adding to its existing pipeline of high quality development projects,” Arcelor’s finance chief, Aditya Mittal, said in a statement.

“ArcelorMittal already has a significant iron ore presence in Canada through ArcelorMittal Mines Canada and has the technical and project management expertise to develop the Mary River property.”

 

Posted 11/8/2010

 

 

 

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