Mittal succeeds in making Arcelor see his way, Euroshares surge

Mittal succeeds in making Arcelor see his way, Euroshares surge

	Published : Mon, 26 Jun 2006 12:00 By : Amy Watts Print this Story

LUXEMBOURG - Steel baron Laxmi N Mittal succeeded in wooing Arcelor after months of bitter and sometimes acrimonious fight. The deal was announced over the weekend after Arcelor finally accepted an improved £18.5bn ($34bn) offer from Mittal.

The takeover was enough to send Euroshares surging and this trend managed to offset Wall Street losses to a minor extent. The decision to merge Arcelor and Mittal will create a steel giant that will leave its competitors miles behind in terms of production as well as revenues. "This is one of the greatest days in the history of Mittal Steel and a seminal event in the steel industry that will shape its future," Mittal chief Laxmi Mittal said of the deal sealed on Sunday.

Luxembourg-based Arcelor fell in with the decision after talks, which lasted for nine hours. The company is expected to put the proposal to its shareholders later this month. The companies will announce the terms of the deal in a press meet slated for Monday although an Arcelor spokesman said that they had not decided what to do with Dofasco, the Canadian firm acquired by Arcelor. The latter has made it clear that it wants to hang onto it, but Mittal wants to sell it to German group ThyssenKrupp.

Meanwhile, Russian group Severstal, which though it had a first option on Arcelor has said that it is reviewing its options and could go the legal way. "We have a legal, binding merger agreement that the board of Arcelor entered into," the group said in a statement. "(Arcelor) has unanimously supported it to date, consistently affirming the industrial logic, the better business sense and the higher value creation behind our agreement on several occasions."

Arcelor has hinted that Severstal could be offered £140 million in break-up fees, but no decision has yet been made.