ECONOMY

Oyak, Arcelor say dropped agreement may be revived

ISTANBUL – Turkey’s Oyak Group ditched a deal with Arcelor for the joint acquisition of a stake in steelmaker Erdemir yesterday to avoid procedural delays, but both said an agreement could be revived. Oyak, the army’s pension fund, won a tender for a 46 percent stake in Turkey’s Erdemir last October with a $2.77 billion (2.32-billion-euro) bid, trumping Arcelor and others. It then sold Arcelor a 41 percent stake in a company created to buy Erdemir, but said yesterday it had dropped that deal in order to avoid financing and legal delays. However, Arcelor – subject of a $22 billion (18.4-billion-euro) unsolicited bid from Mittal Steel – stated it was still interested in «the same type of partnership» it had sought before and Oyak said the pair could discuss a revival. «Once the purchase process for the Erdemir shares is completed… Oyak and Arcelor are contemplating continuing exclusive talks and searching for possible areas of cooperation,» Oyak said in a statement. The news is the latest hiccup in Turkey’s International Monetary Fund-backed privatization program and comes after the top administrative court suspended the sale of oil refiner Tupras. Top privatization body OYK had approved the Erdemir sale, while the decision of the antitrust authority had been expected today, but officials said yesterday Oyak and Arcelor had withdrawn their application to buy the stake together. Erdemir stock fell almost 4 percent in early trade after sources close to the situation told Reuters the deal had been dropped. The shares later trimmed some losses after the Oyak statement to close 2.2 percent weaker. The main Istanbul share index fell 1 percent. One analyst in Istanbul said the stock would recover after any partnership deal was finalized. «Once that is clear, the stock will move off these levels,» he said. «I’m sure they’ll make some kind of partnership,» he added. Tera Securities General Manager Emre Tezmen said uncertainty as to the fate of the deal was limited, breaking the fall in Erdemir’s shares. «Erdemir will always remain on the agenda as an important company. We can say that the selling seen now is an opportunity for buying,» he said. Oyak said the decision to cancel the arrangement was «in order for Turkish and foreign banks providing financing and support to be able to make their preparations, and because there was a timing problem with meeting the Turkish and international legal requirements.» Oyak has investments in the automotive, cement, financial and services sectors. Among its high-profile investments is an automotive joint venture with French carmaker Renault.