Tuesday, January 31, 2006

Arcelor say Mittal bid "Unwelcome"

It’s clear that Arcelor consider the Mittal bid to be most unwelcome, with their CEO stating that the company will fight long and hard to resist the takeover. The bid came as a shock to most of us, if only for its audacity but in this global world in which we all live (including giant steel companies) it may be pointing the way forward.
Europe has already undergone huge changes in the balance of its steel industry in the last ten years with the mergers that created Arcelor, Corus and Thyssen-Krupp, but whatever the result of Mittal’s current bid it’s clear that by the end of 2006 the balance will have changed again. Furthermore, I suspect that Dofasco will not be the last North American Steel Company that will attract interest from this side of the Atlantic.
Arcelor, the European steelmaker, yesterday launched its defence against Mittal Steel's hostile €18.6bn (£13bn) takeover bid with a savage attack on its predator's track record, claiming Mittal had destroyed shareholder value and jobs and had a shoddy record on corporate governance and safety.
Taking the gloves off in what executives promised would be a six-month battle, Guy Dollé, Arcelor chief executive, virtually ruled out any deal with Mittal now or in the future.
"It is too late. It cannot be done after an offer of this kind," he said, criticising Lakshmi Mittal, the group's chairman, and his family for failing to enter prior talks about a friendly merger of the world's two biggest steelmakers.
"There was no discussion, there was no offer. There was a discussion of four minutes at the end of an aperitif," he told reporters, referring to a dinner on January 13 at Mr Mittal's £35m mansion in Kensington, London.
He added: "A company worth up to €40bn in revenues deserves more than a four-minute conversation." A friendly discussion, however, could have justified a merger on strategic and synergy grounds. MORE

EU antitrust chief not in principle opposed to large steel merger
BRUSSELS: European Union antitrust chief Neelie Kroes said Tuesday she was not in principle opposed to large steel merger such as Mittal Steel Co.'s bid for Arcelor SA.
"I am not shocked by big, little or small mergers,'' she said.
The EU's executive Commission had not yet received a request by either company to clear the merger and Kroes said she would look at it carefully in line with EU competition rules. - AP

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Eddy Elfenbein
Steel on the net
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