Arcelor takeover by June: Lakshmi Mittal
Lakshmi Mittal, the London-based industrialist of Indian origin, is confident of completing the takeover of steel major Arcelor by June.india Updated: Apr 20, 2006 19:28 IST
Lakshmi Mittal, the London-based industrialist of Indian origin, is confident of completing the takeover of steel major Arcelor by June despite protectionist postures adopted by European governments against the move.
Mittal has been touring various European capitals to convince political leaders about the business logic of the proposed merger with Arcelor. During meetings with top leaders, he cited the need for a "European global champion" to compete with cheaper products from China and India.
"You have to create a European global champion to protect jobs - otherwise companies in Europe will be more susceptible to cheap products coming in from China and India. That is what Mittal Steel/Arcelor is all about," Mittal told The Telegraph.
"We have promised there will be no job cuts and to continue to invest money and strengthen research and development."
Speaking to BBC Radio Five, he said he was confident that "at the end of the day shareholders will make the right decision" and "we should be completing the merger before the end of June".
"Since it was announced, the transaction has created value of more than 7.5 billion pounds for shareholders in both companies (through the rise in stock prices)," he said, but ruled out an all-cash bid, claiming that Arcelor shareholders would be happy to take just a quarter of the bid in cash.
Mittal said that protectionist postures in France came as a surprise to him when "Arcelor was itself created out of a merger. I'm surprised there was such a move against our proposal.
"To create a strong European company, you don't need protectionism - you need an open economy and cross-border mergers and acquisitions," he said.
The Times reported that fears were mounting at Mittal Steel that Luxembourg's government could seek to scupper the company's bid for Arcelor by enacting new legislation that requires Mittal to pay for its offer in cash.
The Luxembourg Chamber of Commerce has reportedly proposed an amendment to a law that would preclude any company with less than a quarter of its stock in public ownership from launching a share-based offer for another group.
Mittal Steel, a Dutch company 88 percent owned by the Mittal family, would fall below that threshold, forcing it to fund its bid with cash.
First Published: Mar 21, 2006 11:41 IST