Arcelor-Mittal agreement lifts Asian steelmakers

By Ilya Garger, MarketWatch
Last Update: 5:03 AM ET Jun 26, 2006
HONG KONG (MarketWatch) -- Asian steel shares got a boost Monday after an agreement between Mittal Steel Co. and Arcelor SA to create the world's largest steel company raised expectations of further industry consolidation in a region that boasts four of the world's six largest steelmakers.
"There's a possibility that Mittal will come to Asia," said Yoji Takeda, vice president of RBC Investment Management in Hong Kong. "The valuations of Asian steel companies are not expensive at all, and considering the growth opportunities, it could happen."
Takeda said that Mittal's most probable targets would be large, high-quality producers in Japan or Korea, where the industry is already heavily consolidated. But he added that Mittal would likely wait before making another large acquisition in the wake of the Arcelor deal.
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