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Mar 06 2006

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Arcelor takes 50% stake in Moroccan steelmaker Sonasid

The decision came as a result of a Partnership Agreement that Arcelor, Morocco's state-owned National Company for Investment (SNI) and the reference shareholders of Sonasid (MAMDA-MCMA, Axa Assurances Maroc, RMA-Watanaya, CIMR, and Attijariwafabank) agreed to develop Sonasid.

"The main objective of the agreement is to consolidate and develop the position of Sonasid on the Moroccan market and to allow it to benefit from the transfer of Arcelor's technologies and skills in the long carbon steel product sector," companynewsgroup website said.

Economic experts see this partnership agreement as the founding stone for Arcelor to further strengthen its positions in markets with a high growth potential, considering that Sonasid may become a platform for future developments in the region.

By virtue of this agreement, Arcelor, SNI and the reference shareholders will group their respective stakes in Sonasid's capital by transferring their shares in the company to a holding at MAD 1,350 per share.

Arcelor will join an all-cash capital increase for the holding company, after which its capital will take 64.86% of Sonasid.

The holding company will then launch a takeover bid for the remaining shares, offering MAD 1,350 (USD 148) in a deal valuing Sonasid at Euro 480 million (USD 577 million.)

According to companynewsgroup website, the conditions for this take-over bid will be the same as for the transfers of Sonadid shares to the holding company by Arcelor, SNI and the reference shareholders, i.e. MAD 1,350 per share. This operation will be subject to the decision of the Conseil Déontologique des Valeurs Mobilières regarding the admissibility of the bid.

Arcelor currently holds a 7.5% stake in Sonasid, which holds a leading position in the long products sector (rebars and wirerod), with a production capacity of around 1.4 million tonnes and a turnover of close to MAD 4 billion (approximately 374 million euros) in 2004.

The Sonasid company is listed on the Casablanca stock exchange and its current market capitalisation amounts to close to MAD 5.2 billion.

Arcelor remains the number one steel company in the world with a turnover of Euros 32.6 billion in 2005. The company holds leadership positions in its main markets: automotive, construction, household appliances and packaging as well as general industry.

"The company ambitions to further expand internationally in order to capture the growth potential of developing economies and offer technologically advanced steel solutions to its global customers," companynewsgroup website emphasised.

As for the National Company for Investment, it was created in 1966. It is a financial holding company listed on the Casablanca stock exchange, which actively participates in value accretive projects.

The main items in SNI's portfolio are its investments in ONA, Lafarge Maroc and Sonasid. The company is the main shareholder of Groupe ONA, the first private industrial and financial group in Morocco.

On Dec. 31, 2004, the consolidated turnover of the company amounted to MAD 1.7 billion (approximately Euros 155 million), with a consolidated net profit of MAD 467 million (approximately MAD 43 million).