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.
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.
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
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
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.
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.
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.”