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France to get Mittal's plan for Arcelor on Monday

Mittal to talk personally with French Finance Minister about the offer, amid continuing European political opposition.

india Updated: Feb 23, 2006 10:52 IST
Reuters
Reuters
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Mittal Steel said on Wednesday it would present the French government with the key aspects of its contentious $22 billion offer for European rival Arcelor at the start of next week.

A spokeswoman for Mittal Steel added that its Indian-born chief Lakshmi Mittal wanted to talk personally with French Finance Minister Thierry Breton about the offer on Monday, amid continuing European political opposition to the bid.

Mittal's spokeswoman also said that the Mittal camp remained open to talks with the Arcelor management.

"From the first day we have demanded to see an industrial project and I have good news for you ... I have been informed this morning that we are going to get this industrial project early next week," Breton said earlier in parliament.

"That will allow the services of Bercy (the Finance Ministry) to finally ask all the necessary questions and allow us to defend the interests of France," he added.

Breton said the senate had accepted a change in the law that would allow companies facing a hostile takeover to resort to a "poison pill" defence by issuing share warrants, clearing the ground for the legal change to go through.

Arcelor's chief executive has already said the French change in the law will not be applicable to the Luxembourg-based company.

Chirac's concerns

French government officials, and Breton in particular, have been outspoken in their opposition to the unsolicited takeover proposal by Mittal Steel.

Breton, a former chief executive of France Telecom and Thomson, had called the proposed bid "badly prepared" and said the hostile approach had broken unwritten rules on how to start a takeover bid.

President Jacques Chirac, during a state visit to India, told Indian Prime Minister Manmohan Singh earlier this week that the French concerns were legitimate and not steeped in racism.

With 26,600 employees in France, Arcelor is an important company for the country and in the run-up to the 2007 presidential elections the government is conscious of the votes of steel sector workers.

But unlike Luxembourg and Belgium's Walloon region, France no longer has a stake in the company that was formed in 2002 out of the merger of France's Usinor, Luxembourg's tighten and Spain's Aceralia.

Mittal Steel was founded and is still controlled by Lakshmi Mittal, a British-resident steel billionaire born in India, and the political opposition to the takeover proposal was perceived by some Indian politicians as xenophobic.

Laws tighten as bids flare up

European Internal Market Commissioner Charles McCreevy said on Tuesday that moves by France and Luxembourg to beef up corporate defence measures in their legislation went against the spirit of free movement of capital. Germany too is tightening its law to allow companies to defend themselves.

Italy's Economy Minister Giulio Tremonti said, however, that if the French takeover law were passed, it would mean Italy's laws were more lenient as the government welcomed cross-border mergers.

French bank BNP Paribas made a takeover bid for Italian lender BNL after a highly publicised battle by Dutch ABN AMRO bank for Antonveneta.

Meanwhile, Germany's EO.N made an unsolicited 29.1 billion bid for Spain's Endesa with Italy's Enel saying it is ready to help Gas Natural raise its earlier bid for Endesa as cross-border European merger activity rapidly hots up.

First Published: Feb 23, 2006 10:52 IST