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Arcelor Mittal has completed the open offer to buy around 29% stake in Uttam Galva Steel that would allow it to take its total holding to over 34%. As per a disclosure made by SBI Cap, the manager to the offer, the offer saw 100% participation from shareholders who were offered Rs 120 a share translating into a deal value of around Rs 422 crore for the open offer.

It is to buy another 5.6% stake from the promoter group (Miglani family) of Uttam Galva which will take the total deal value to Rs 500 crore. Promoters owned as much as 44.2% as of December’09 and had agreed to a co-promoter agreement with Arcelor Mittal, the world’s largest steel producer, last year.

Currently, Uttam Galva is trading at Rs 107.85, a discount of 10% on the price at which Arcelor is buying stake. At this price, Uttam Galva is valued at Rs 1,315 crore. The stock had hit a high of Rs 142 few months back when it valued the firm at Rs 1,735 crore ($ 375 million).

The deal gives a strong India foothold to Arcelor Mittal whose promoters LN Mittal has been trying to set up greenfield projects in India. The greenfield projects that were expected to absorb investments worth $10 billion each has been pending for years and now Arcelor Mittal is looking at alternate sites for the project.

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