Mittal, the world’s largest steel group by volume, is offering about 18 billion euros ($23.2 billion) of cash and its own shares for Arcelor, the world’s biggest by sales, having received regulatory clearance for the bid from watchdogs in Belgium, France and Luxembourg earlier this week.
Thursday’s offer is open until June 29. Regulators have said that the result will be announced on July 13.
If successful, Rotterdam-based Mittal, controlled by billionaire Chief Executive Lakshmi Mittal, will create a global giant worth around $40 billion, employing 320,000 people and producing around 10 percent of the world’s steel.
Arcelor has urged shareholders to preserve the company’s independence and has already promised an increased 2005 dividend and a 5-billion-euro share buyback at a price above the market level in a bid to convince them to reject the bid.
Arcelor is a European based steelmaker with plants throughout the region but concentrated in France, Belgium and Luxemborg. It is in France where the strongest opposition lies, with senior executives and Government ministers speaking out against the bid. Whilst job fears are cited as the major reason for opposing the bid, comments regarding the difference in culture between a European company like Arcelor, and Mittal have led to accusations of racism. I would however dare to suggest that Gallic pride may play no small part in the stance taken in France.
There is no doubt that the battle ahead will be brutal with many “twists and turns” and that we will visit this story again over the coming weeks.