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Mittal clinches Arcelor deal
Five months after he made the hostile bid for the European steelmaker, Lakshmi N Mittal is a happy man.
Five months after he made the hostile bid for European steelmaker Arcelor, Mittal Steel owner Lakshmi N Mittal is a happy man.
Arcelor directors on Sunday backed a partnership deal with Mittal Steel, a Mittal spokesman said after a marathon meeting of the Arcelor board in Luxembourg. Arcelor had resisted the proposal for the past five months.
An Arcelor-Mittal marriage would create a global steel behemoth, with annual production of around 100 million metric tonnes, more than three times the output of its nearest rival, Japan’s Nippon Steel, with 32.4 million tonnes.
A source close to Arcelor said Mittal and Arcelor executives, who engaged in intensive talks over the past several days, would hold a press conference in Luxembourg on Monday.
Arcelor’s board met to debate on whether to back Mittal’s bid or go for a rescue deal with Russia’s Severstal. Even as the board meeting was on, television channels in India reported a merger “in principle” between the two companies. They said the new company would be called Arcelor-Mittal.
Arcelor would pay 130 million euros to Severstal as a “fine”, the channels said.
Quoting unnamed sources, NDTV Profit and CNBC TV-18 said Mittal and Arcelor chairman Joseph Kinsch would be co-chairmen of the merged company. NDTV Profit said Mittal’s stake would come down to 45 per cent.
A source told AFP that Mittal had made an improved offer of 40.37 euros per Arcelor share, up from a previous offer of 37.74 euros, in its bid to forge a partnership with the number two steel producer. The Arcelor shares, in which trading has been suspended since Wednesday, were last quoted at 35.02 euros.
The offer by Severstal, controlled by Alexei Mordashov, was popular with the Arcelor management but opposed by many shareholders.
Arcelor had earlier this month formally rejected Mittal’s 25.8-billion-euro bid. But such was the hostility generated by Severstal’s Mordashov that Arcelor had to agree to renew talks with Mittal. Arcelor shareholders feared that Mordashov might one day take control of the entire company.
