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India monitoring Arcelor deal: Nath
India's commerce minister expressed concern over the storm it raised in France, reports Nabanita Sircar.
"India will be closely watching the issue of the takeover bid of Arcelor made by Mittal Steel and the reaction of the French government," said India's Commerce Minister Kamal Nath, after his luncheon meeting with EU Trade Commissioner Peter Mandelson in London on Wednesday.
The minister also expressed his concern to Mandelson, during their meeting, regarding the issue after the recent storm it has been stirred in France. Mandelson informed that Indian-born Lakshmi Mittal was in Brussels on Wednesday regarding his company's bid.
"If and when the case is referred to the Commission we will examine it." He said it would be based on "strategic interest and India's concern."
Mandelson iterated, "We preach openness in WTO and it should be no different in the EU."
British trade and industry secretary Alan Johnson also attacked French protectionism as the political fight over Mittal's bid intensified. Johnson warned against any attempts to "repel the surge of globalisation", saying measures to protect "key industries from foreign takeovers" among the UK's European neighbours were "futile and self-defeating."
He said, "There are advocates of protectionism amongst some of our closest European neighbours. Measures to protect key industries from foreign takeovers where there are no state security issues are futile and self-defeating. The paradox of protectionism is that it destroys what it seeks to protect."
Nath asserted, "Whatever both governments do, must be conducive to business in both countries. Its a business-to-business issue." Nath pointed out to the French Lafarge takeover of a major portion of the Indian cement industry, and the "good relations India shares with France".
The row intensified after Arcelor chief Guy Dolle told British investors on Tuesday to spurn Mittal. During his whistle-stop visit to London the Arcelor chief said Mittal's Steel's bid significantly undervalued the prospects of the European steel group and urged British investors to reject the unsolicited $23 billion offer.
He even said that if Mittal came back with an offer, Arcelor "could not trust" him to sit down and talk about how a merger of the two might work because of the way he had sprung his unsolicited bid without any prior consultation.
Meanwhile, political opposition to Mittal across Europe deepened with Luxembourg's Prime Minister Jean-Claude Juncker publicly rejecting the offer and the French finance minister Thierry Breton telling his parliamentary that he had never seen such a "badly prepared" takeover attempt.
He said that as a stakeholder it was legitimate for Paris to question Mittal's failure to negotiate with Arcelor before his bid.
Meanwhile, one of Arcelor's non-state shareholders emerged to criticise the backlash against Mittal Steel's bid. Gérard Augustin-Normand, president of Richelieu Finances and an Arcelor shareholder, said political interference in the bid did "no credit to our country. Fund managers need to consider the offer in all independence - beyond philosophical, religious and political concerns. The only context is the price," Augustin-Normand said.
Mittal, who is in Madrid on Thursday to hold talks with Spanish ministers, said at a press conference that he has no intention of raising the cash element of his company's $24 billion bid for Arcelor. "We have no intention to do that," he said when asked if Mittal could raise the cash portion. "We think this is a very attractive proposition." He also dismissed talk that this was a bid for a European company by an outsider, "This is a merger of two European companies, not a foreign company," he added.
