Arcelor may buy US Steel to ward off Mittal

Arcelor is planning to buy rival US Steel as a potential poison pill against Mittal's takeover.

European steelmaker Arcelor is examining the possibility of buying US Steel as a potential poison pill against a hostile takeover by Mittal Steel, the FrankfurterAllgemeine Zeitung reported on Tuesday.

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Arcelor had originally considered buying Nucor, the healthiest North American steelmaker, but finally decided against the acquisition in view of Nucor's high stock market valuation of over $12 billion, the newspaper reported, quoting investment banking sources.

It said that Arcelor refused to comment, arguing it did not want to reveal to Mittal its plans to avert a takeover.

Mittal, the world's biggest steel producer, launched a $22.7 billion takeover bid for number two Arcelor late last month.

Arcelor shares were down 2.04 per cent at 30.63 euros in early trading on the Paris stock exchange, where the CAC 40 index was showing a gain of 0.