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Why is Luxembourg afraid of Mittal?

After locking horns with Mittal over Arcelor bid, Luxembourg is sending a minister to New Delhi to explain its opposition.

india Updated: Apr 20, 2006 19:38 IST

After locking horns with LN Mittal over his bid to take over steel major Arcelor, Luxembourg is sending a ministerto New Delhito explain its opposition to India-born industrialist's move and emphasise that the issue should not spoil ties between the two countries.

Luxembourg, which questioned India's involvement in the issue last month after Commerce Minister Kamal Nath voiced criticism over opposition to the deal, is sending its Minister for Economy and Foreign Affairs J Kreeke here on March 28.

During his two-day stay here, Kreeke will meet Nath, Steel Minister Ram Vilas Paswan besides Finance Minister P Chidambaram, sources told PTI here.

He may also meet Prime Minister Manmohan Singh but the meeting has not been confirmed yet, they said.

The Netherlands-based Mittal Steel has made a $22.3 billion bid for 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 governments of Luxembourg, France and Spain and from labour unions, who are worried about job losses even though Mittal has assured that no worker would lose job.

He cited his operations in various countries which had not resulted in retrenchment.

Kreeke will explain why Luxembourg is vehemently opposing Mittal's bid. He is likely to argue that his country was expected to intervene in the bid as it was a share-holder in Arcelor, having 5.6 per cent stakes, the sources said.