Even as most of Europe celebrated with night-long festivities the entry of 10 new nations into the European Union, NRI steel baron Lakshmi Narayan Mittal as doing his way, with M&A.
The LNM Group, of which he is chairman and owner, entered into a joint venture deal with RZR Ljubija for mining and developing iron ore mines in Bosnia Herzegovina. The agreement gives LNM Holdings a majority shareholding of 51% in the mines where the group has committed a total investment of over $40 m to re-start the mines and to develop them into a stable and competitive supplier of iron-ore to customers in the region, including its own plants.
The deal was signed between LNM Group, the world's second largest steel producer, and RZR Ljubija for "participation in the mining and development of the Ljubija mines in Bosnia Herzegovina," a spokesman of LNM Group said in London.
An aggressive merger & acquisition strategy has already put LNM on the Continental map in a big way as top steel producer of Central and Eastern Europe with annual steel making capacity in excess of 14 million tonnes and major steel making facilities in Poland, Romania and the Czech Republic. Most recently the group completed privatisation of Polskie Huty Stali, Poland's largest steel maker.
"Acquisition of iron ore and coal mines fits in with our strategy of verical integration. We are concerned over shortages of raw materials and would like to safeguard our own supplies through ownership and greater control of mines,'' L N Mittal told ET. The group already has stake in coal mines in Kazakhstan. "Completion of the JV highlights the commitment of LNM to the region and its long term plans of revitalising local steel industry," the group spokesperson added.
LNM Holdings recently submitted a bid to acquire a majority stake in BH Steel from the Govt of the Federation of Bosnia and Herzegovina and expects to close acquisition of the Macedonian company Balkan Steel soon which would further strengthen its presence in the region.
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