Mittal takes campaign to Spain
The Indian-born billionaire has vowed not to be intimidated by politicians as he strives to build a steel-making colossus.india Updated: Feb 02, 2006 18:25 IST
Steel magnate Lakshmi Mittal goes to Spain on Thursday in the latest leg of his European tour to win support for his $24 billion bid for Arcelor, as French and Luxembourg leaders try to organise opposition to it.
The Indian-born billionaire has vowed not to be intimidated by politicians as he strives to build a steel-making colossus that would control about 10 per cent of the global market.
"I'm not really scared about politicians' reactions," he told reporters in Brussels late on Wednesday after meeting with European Union officials.
Mittal, who controls Mittal Steel, the world's biggest steel-maker, said he had the backing of institutional investors.
He also dismissed concerns that his takeover of one of Europe's biggest multinationals would lead to the loss of tens of thousands of jobs.
Mittal has said the merger would create about $1 billion of synergies, sparking fears for Arcelor's 96,300 workers.
On Thursday, his tour takes him to Madrid where he will meet with Spanish Economy Minister Pedro Solbes.
Luxembourg Prime Minister Jean-Claude Juncker has embarked on his own tour of Europe to try to build a political defence for Arcelor, which is based in his Grand Duchy.
"This hostile bid by Mittal Steel calls for a reaction that is at least as hostile," he told reporters in Paris after meeting French politicians on Wednesday.
Juncker said he and French Prime Minister Dominique de Villepin had a common response to Mittal, but he has not said specifically what it was.
The Luxembourg minister meets European Commission President Jose Manuel Barroso in Brussels on Thursday.
BELGIUM, SPAIN CAUTIOUS
Arcelor is the product of a three-way merger between Spain's Aceralia, France's Usinor and Luxembourg's Arbed. Luxembourg is the biggest single shareholder, with a stake of 5.6 per cent.
Although French leaders have joined him in condemning the bid, those in Belgium and Spain have been more cautious.
Belgium, which has a 2.3 per cent stake in Arcelor, is hiring a banker to help it decide what to do.
Spain also plans to study the bid carefully and get more information on what Mittal's bid meant for workers in Spain.
EU officials say they will review the bid strictly on competition grounds, adding that EU member states cannot intervene on mergers of a European dimension.
Political and financial analysts say the French government has little leeway beyond the power to create significant political nuisance for Mittal, whose company is Dutch.
Arcelor Chief Executive Guy Dolle rejects the bid, accusing Mittal of trying to get its hands on Arcelor's cash flow of more than 3 billion euros a year to rebuild old mills in east Europe and the United States.
Dolle is striving to convince shareholders that the future of Arcelor is as a stand-alone company.