UPDATE 3-ArcelorMittal launches $1.8 bln buyout for Brazil unit
(Adds Luxembourg stock exchange recommendations on corporate governance)
By Philip Blenkinsop and Julien Ponthus
BRUSSELS, Dec 4 (Reuters) - ArcelorMittal (MTP.PA), the world's largest steelmaker, announced a plan to spend up to $1.8 billion to buy out minority investors in a Brazilian unit, and said its chief executive would take on the role of chairman too.
ArcelorMittal said it wanted to buy the 43 percent of Inox Brasil ACES4.SA it does not already own.
The Luxembourg-based group will offer 100.00 Brazilian reais ($55.68) per common or preferred share, a premium of 22 percent to the 60-day average preferred share market price.
The steelmaker, which intends to delist the company, said a group of shareholders owning 157,300 common shares and 7.91 million preferred shares had already committed to sell.
The offer's launch must be approved by Brazilian financial markets regulator CVM.
"This tender is strategically beneficial to ArcelorMittal because it not only reinforces our position in the high growth area of Latin America, but it also strengthens our position in silicon steel, ferritics and specialty stainless steel," ArcelorMittal CEO Lakshmi Mittal said in a statement.
ArcelorMittal completed a squeeze-out of its other Brazilian unit Arcelor Brasil in June 2007 after a legal row with the CVM.
CEO AND CHAIRMAN
In a separate announcement the steel behemoth said its CEO and majority owner Lakshmi Mittal would also take on the role of chairman when Joseph Kinsch retires in May 2008.
"The board has unanimously nominated Lakshmi Mittal to become the new chairman," a statement from the company said.
When Mittal Steel acquired Arcelor last year after a bitter takeover battle, it said it would stick to Arcelor's corporate governance model with different people holding the posts of CEO and chairman, and that an Arcelor executive would be the CEO.
But steel magnate Lakshmi Mittal took the reins at the newly merged group about four months after the takeover battle ended, replacing an Arcelor man as CEO.
Lakshmi Mittal's appointment as chairman goes against one of the recommendations of the Luxembourg stock exchange, on which ArcelorMittal is also listed, that the chairman and CEO of a company should be different people, with a clear distinction between their duties set out in writing.
"Lakshmi is clearly the most recognised steel industry professional in the world today. I have no doubts that under his guidance the company will continue to go from strength to strength," Kinsch, who was the chairman of Arcelor before the takeover, said in the statement.
Mittal is currently president of the board and will be replaced by a "lead independent director", the company said. (Editing by David Cowell and Erica Billingham)
