Mittal's nationality irrelevant: EU
EU says it is against racial discrimination and the issue should be treated only on commercial considerations.Updated: Feb 14, 2006 14:59 IST
Amid the raging controversy over Mittal Steel's takeover bid for rival Arcelor, the European Union said on Tuesday that it was against racial discrimination and the issue should be treated only on commercial considerations.
"The EU is of a clear view that nationality in such cases is not relevant and it should be decided according to the laws in place and commercial merits," European Commission Director General - Trade, David O'Sullivan said.
"It is unfortunate that allegations of racial discrimination have crept in the issue," he added.
However, he made it clear the EU would be concerned if there were any violations of competition rules and the takeover created a monopoly kind of situation.
The Netherland-based Mittal Steel has made a $22.3 billion bid for Luxembourg-based Arcelor, which would create a steel company with an output three times bigger than its three nearest rivals combined.
The bid has sparked objections from the governments of France, Luxembourg and Spain and from labour unions, who are worried about job losses even though Mittal has assured that no worker would lose job and cited all his operations in various countries had not resulted in retrenchment.
The issue is also likely to figure during French President Jacques Chirac's visit to India early next month.
Commerce Minister Kamal Nath had earlier warned European governments against racist reactions to Mittal Steel's takeover bid for Arcelor.
O'Sullivan said there was a debate going on in Europe about the way in which takeovers can be decided. However, he said, it was a matter between two European companies and "ultimately it is for the shareholers to decide."
The EU's observations came amid reports that the Government of Luxembourg, a shareholder of Arcelor, will soon rush through a bill aimed at thwarting Mittal's hostile bid.
Luxembourg's finance minister Luc Frieden has said the bill adopted an amended version of a EU takeover directive that will allow a besieged company board to take drastic action to repel a hostile takeover without seeking prior consent from shareholders.
O'Sullivan said EU Trade Commissioner Peter Mandelson has also made it clear that European Commission should not be "carried away by the emotions of economic nationalism" when it comes to judging big takeover bids in Europe.
Mandelson had last week warned against excessively nationalistic responses to takeover bids and mergers in Europe, referring to some recent "big takeover bids", without specifically mentioning Mittal Steel's bid for Arcelor.
The matter should be decided on economic and commercial considerations, O'sullivan added.
First Published: Feb 14, 2006 11:39 IST