ArcelorMittal to write down European biz value by $4.3 billion
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ArcelorMittal, the world's biggest steelmaker, is to write down the value of its European business by $4.3 billion, underscoring gloom about prospects for the region's recession-hit manufacturers.
The group, formed in 2006 when Lakshmi Mittal's steel business bought European peer Arcelor for $33 billion, said on Friday demand had fallen about 8 per cent in Europe this year and there was no sign of a quick recovery.
As a result, it will write down the goodwill — the value of intangible assets such as brands rather than physical assets such as machinery — of its European operations by 87 per cent. "It is negative, but it should not really be a big surprise that the book value of its European business was too high," said a London-based analyst. ArcelorMittal shares were down 2.7 per cent at 12.85 euros at 1300 GMT, one of the biggest falls by a European blue-chip stock. Credit agency Fitch cut ArcelorMittal's long-term issuer default rating to BB+, just below investment grade, due to the challenging outlook for Western European steel markets in 2013.
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