PARIS (Reuters) - Steelmaker ArcelorMittal ISPA.AS said it will sell a majority stake in its Algerian operations to the Algerian state as part of a $763 million investment agreement.
Algerian state-controlled entity Sider will own 51 percent of ArcelorMittal’s Annaba and Tebessa units as part of the deal, with Arcelor owning the rest, according to a statement from Arcelor on Sunday. The current ownership split has Arcelor owning 70 percent and Sider owning 30 percent.
The sale price of the stake was not disclosed.
ArcelorMittal, the world’s largest steelmaker, recently cut its 2013 profit guidance due to weaker-than-forecast demand in some regions and lower raw-materials prices.
The Algeria deal covers two iron-ore mines and the El-Hadjar steel plant in the eastern town of Annaba, whose production would more than double to 2.2 million metric tons from 1 million in 2017 under the new agreement.
The El-Hadjar plant has been hit by strikes over pay rises in the past months.
Arcelor said the investment would be funded by shareholders and by bank credit.
Talks between Arcelor and the Algerian government were first confirmed on September 17 by Algerian Prime Minister Abdelmalek Sellal via state news agency APS.
Reporting by Lionel Laurent; Editing by Ruth Pitchford