ECONOMY

Oyak chose Erdemir

ANKARA (Reuters) – Turkey’s Oyak Group has ended a partnership with European steel giant Arcelor to buy a minority stake in Turkish steel group Erdemir due to regulatory concerns, sources close to the situation said yesterday. «Oyak’s partnership with Arcelor creates problem as regards the competition law,» said a government source, who declined to be named. Arcelor and Oyak had no immediate comment. Oyak, a private banking-to-automotive group, won a bid of $2.77 billion (2.32 billion euros) for a 46.12 percent stake in Erdemir in an auction last October, trumping Arcelor and others. But in December, Oyak sold to Arcelor a 41 percent stake in a vehicle company set up to purchase Erdemir, which is a key part of the country’s IMF-backed privatization program. Another source, who also asked to remain anonymous, said Oyak had instead begun the necessary procedure to buy Erdemir on its own, and had informed the authorities of its decision. «This will have no impact on the sell-off. Oyak will either find a new partner or go ahead alone,» said Mehmet Emin Zumrut from Ata Invest. Financing He said a possible partner for Oyak could be the world’s biggest steelmaker Mittal Steel, which has made a $22 billion (18.4-billion-euro) bid to buy Luxembourg-based Arcelor. Mittal was one of the original bidders for Erdemir last year. Oyak, the army pension fund, said in December it had secured a $1.6 billion (1.34 billion euros) loan from a group of banks to finance the purchase of Erdemir, Turkey’s largest flat steelmaker. Top privatization body OYK has approved the sale, but the decision of the antitrust authority is expected tomorrow. «It could be very negative for the stock because the deal was expected to be closed in the next week or so and there was a deadline,» said an Istanbul-based analyst, adding that the worst-case scenario would be Oyak going it alone. Erdemir closed 1.13 percent higher at 8.95 liras yesterday. Oyak has investments in the automotive, cement, financial and service sectors, including a joint venture with French carmaker Renault.

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