When the world’s largest steel company Arcelor Mittal acquired a 28% stake in steel company China Oriental Group in November 2007, it made no secret of its desire to gain control of China Oriental and aggressively expand into the Chinese market. That dream, however, became short-lived. On May 13, 2008, Arcelor dropped its takeover bid of China Oriental after the deal failed to clear the Chinese anti-monopoly authority in the required six months.
Yet anti-trust concerns could not have been significant. After all, the output of China Oriental is only a tenth of that of newly-created Chinese leader Hebei Steel. The real reason for the deal’s failure, then, must be the prohibition of foreign control of steel enterprises in China. The anti-trust process, however, was conveniently leveraged to achieve the ultimate goal of preventing foreign control.