Steel Giant Seeks Controlling Stake in Cooper JV Company

Information supplied by a spokesman for leading global steel manufacturer Arcelor Mittal indicates that the company plans to pay US$27 million for a controlling stake in China’s Chengshan Steel Cord Co. This stake, according to a China Business News report of June 20, could be higher than 90 per cent, however its exact size has not been specified, and Chinese government approval must first be granted before any transaction can take place.

The firm at the centre of the takeover plans is located in Rongcheng, Shangdong Province, and is a 75-25 per cent venture between Shandong Chengshan Group Co and the Cooper Tire & Rubber Co. The company produces steel cord and bead wire for use in tyre reinforcement, and has an annual output capacity of more than 60,000 tons. Chengshan Steel Cord achieved sales of 375 million yuan (£24.6 million) in 2006, up 51.5 per cent from a year earlier.

Cooper Tire has not commented on this proposed deal, but if it takes place they may be required to pull out of the venture they helped establish.