Shougang unit's acquisition plan of ore producer foiled

Shougang Concord International Enterprises Co (SCIE)<697>, a Hong Kong-listed unit of China's state-owned leading steelmaker Shougang Corp, was blocked in its plan to buy a 19.7% stake in Australian iron ore producer Mount Gibson Iron Ltd from Russia's Gazmetal Holdings due to Shougang's links to an existing shareholder.

SCIE is charged to cancel the bid as it is associated with an existing Mount Gibson shareholder APAC Resources Ltd, which holds 20% stake in the Australian company, according to a statement released by Australia's Takeovers Panel on Tuesday.

Usmanov's Gazmetall Holding (Cyprus) Ltd agreed in January to sell Shougang a 9.3% stake in Mt Gibson for A$201 million (US$183 million) and an option over a 10% stake. But the Panel, supported by Mount Gibson, argued the deal disobeyed the country's enterprise laws.

Perth-based Mt Gibson has a market value of A$2.3 billion (US$2.1 billion). Gazmetal Holdings, controlled by billionaire Alisher Usmanov, is Russia's biggest supplier of iron ore.