Mittal presses on with Arcelor offer

24-08-2006

Mittal Steel has confirmed that talks with its rival Arcelor began yesterday, as part of its attempted takeover of the steelmaker.

Arcelor has so far resisted any attempts by Dutch-based Mittal to acquire it, rejecting an unsolicited €21.5 billion (£14.8 billion) bid earlier in the year. The company had promised shareholders extra dividends if they reject Mittal's overtures, and instigated merger talks with Russian steelmaker Severstal.

But following an improved bid of €25.8 billion (£16 billion), which lessened Mittal's controlling share if the offer was successful and was granted EU approval, the chief operating officer of Mittal revealed that talks were underway.

"We have started discussions with Arcelor. Yesterday was the first day. Right from the very beginning we said we were willing to talk," said Malay Mukherjee.

Despite Arcelor's best efforts, shareholders are believed to prefer the prospect of Mittal's takeover, and Mr Mukherjee believes that his company's offer is superior to a merger with the Russian steelmaker.

He commented: "We are definitely more global, our assets are more balanced. We are in all different markets and countries. Severstal is still limited to Russia and has a very small presence in the USA.

"We are convinced that our offer makes the best value for Arcelor shareholders."

Mittal is the world's biggest steelmaker, and Arcelor has consistently rejected its takeover aspirations as it was concerned at the disproportionate amount of controlling interest that the Dutch-based company would retain.

But although he admitted it was "very difficult" to predict how fruitful talks would prove, Mr Mukherjee concluded that the Mittal offer should be difficult for Arcelor shareholders to turn down.

"We have been leaders in consolidation. We are the ones who started this in the industry. We would like the process to continue so whatever opportunities we see, we will definitely look at them," the chief operating officer added.


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