India, EU back Mittal's bid on Arcelor
Kamal Nath and EU trade chief Mandelson criticised politicians in France who were opposed to the takeover bid.india Updated: Feb 02, 2006 17:55 IST
India and the European Union criticised French politicians for trying to prevent prominent Indian origin industrialist Lakshmi Mittal from taking over France-based European consortium Arcelor in a £13 billion deal.
Mittal's bid has been much in the news in the Western media given its dimensions and its implications for his company becoming the world's largest steel producer. If his company were to take over Arcelor, the deal would create a giant controlling 10 per cent of the world's steel production.
The combined company, with 320,000 workers in four continents - of whom 32,000 are in France and Luxembourg - would produce three times more steel than its closest rival.
Indian Commerce Minister Kamal Nath and EU trade chief Peter Mandelson criticised politicians in France who were opposed to the takeover bid. Kamal Nath was here for talks with British and EU officials.
Speaking after a luncheon meeting with Mandelson on Wednesday, Kamal Nath went to the extent of hinting that the French moves against Mittal's company could even trigger a trade war.
Mandelson also issued veiled criticism of the intervention by France and Luxembourg, and said that any inquiry into the deal would be decided on competition grounds alone.
Kamal Nath said: "India is watching closely this issue of the takeover of Arcelor by Mittal and the comments being made and reaction by the French government on this.
"India has a good relationship with France - but we are watching this situation with concern."
Speaking to newspersons, Kamal Nath appeared visibly angered by comments made by French politicians. Brandishing a sheaf of newspaper reports, he said: "We have brought to Peter Mandelson's notice our concerns over the comments emanating from the governments."
He contrasted the French reaction with India's decision to approve the takeovers of some of its cement operations by Lafarge of France.
Asked whether this would impede negotiations to open up countries such as India to foreign investment, he said: "We are talking about globalisation and investment access so there should be nothing that negates that or is a contradiction to that."
Mandelson said he had spoken with Mittal on Tuesday. "If and when the issue is referred to the (European) Commission we will determine it to see if it contravenes European competition rules. We will determine it on its commercial and not its political merits - and not the personal views of the individuals concerned."
Jean-Claude Juncker, the Prime Minister of Luxembourg, which has a 5.6 per cent stake in Arcelor, is reported to have said: "This hostile bid by Mittal calls for a reaction that is at least as hostile."
François Loos, the French industry minister, told MPs: "We have an industrial policy. We are opposed to this Mittal takeover."
On Tuesday, Dominique de Villepin, the French prime minister, called the bid a "problem" because it included "no industrial project". French Finance Minister Thierry Breton said he had never seen such a "badly prepared" bid.
First Published: Feb 02, 2006 17:55 IST