HONG KONG, Dec 13: ArcelorMittal, the world’s largest steel producer, said on Thursday it had agreed to take over China Oriental, as it tries to gain further inroads into the world’s biggest steel market.

ArcelorMittal will raise its stake to 73.13 per cent from 28.02 per cent of shares in the Hong Kong-listed steel maker, the two companies said in a joint statement, a move which will cost around $1 billion.

“Strengthening our position in the fast-growing Chinese market is one of the important elements in ArcelorMittal’s strategy,” said Lakshmi Mittal, president and chief executive officer of the Luxembourg-based company.

“The (agreements) allow ArcelorMittal to be better positioned to participate in the attractive growth of China’s construction steel market and to develop China Oriental into a leading producer of heavy sections, focusing on leadership, quality and sustainability,” he added, in a statement.

Shares in China Oriental surged on the news, jumping 19.3 per cent to close at HK$6.44.

The deal still needs the approval of the Chinese Ministry of Commerce and the State Administration for Industry and Commerce, who are yet to permit a foreign owner to take control of a large domestic producer.—AFP