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Mittal Steel to launch share offer for Arcelor

Company's commitments to keep jobs in Belgium will be followed, Prime Minister told

BRUSSELS: The head of Mittal Steel Co. announced on Wednesday that his company expected to launch an official share offer for its rival Arcelor SA in two weeks.

The value of the cash-and-stock offer is estimated at about $25.9 billion and will need the approval of European Union antitrust regulators who are expected to clear the deal by May 19.

"We are expecting that in the next two weeks the regulators will make it official. And then we will have 35 working days for the shareholders to decide," Mittal Steel Co. chairman and chief executive Lakshmi Mittal said after meeting Belgian Prime Minister Guy Verhofstadt.

Sinking the business

He described Arcelor's attempts to protect itself against a takeover as "sinking the business."

Mr. Mittal said the offer would stand as it was — despite shareholder calls for an all-cash offer. "We are not changing our offer. It is already a very attractive offer with the cash and with the shares. Steel share prices have gone up which has already increased the value of the offer."He said Arcelor's action to ring-fence its recent purchase of Canadian steel firm Dofasco Inc. by transferring all shares to an independent trust was a "very defensive measure to frustrate our transaction."

This will allow Arcelor to keep full business control over the Canadian company but will prevent it — or Mr. Mittal if its takeover succeeds — from selling it off without the full support of the trust.

"This is not good corporate governance, we believe," said Mr. Mittal. "If it is such strategic importance for Arcelor, we do not understand why they should put such kind of assets where the shareholders have no voice."

Mr. Mittal also said Arcelor's plan to share a $6.13 billion dividend out among shareholders would increase the debt level of the company.

"This will also restrict the growth of the company in future or the company will not have any plans to grow in the future. This is kind of sinking the business."

Mr. Mittal said he had assured Mr. Verhofstadt that his company would follow Arcelor's commitments to keep jobs in Belgium. Luxembourg-based Arcelor employs about 15,000 people in the country.

Mr. Verhofstadt and leaders of Belgium's two main regions said they would not give their views on the tie-up until they had carefully analysed Mr. Mittal's business plan for the new company. Mr. Mittal said they would hold a final meeting on the takeover offer in early May.

Extra promises

Elio di Rupo, the leader of the Wallonia region, said Mr. Mittal had also made extra promises to Belgian leaders that he would improve investment in Belgium.

Unlike France, Luxembourg and Spain, Belgium has so far not criticised the deal, which would merge the world's two largest steelmakers to create a titan with nearly 10 per cent of global steel production and a market capitalisation close to $40 billion. — AP

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Mittal Steel to launch share offer for Arcelor

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