Wednesday, June 28, 2006

Takeover "fever" in the Steel Industry

Takeover speculation in the steel industry is rife following the Mittal/Arcelor merger. Corus shares rose on the back of rumours that Severstal, the rival to Mittal is eyeing the English/Dutch consortium. Some analysts also pointed to ThyssenKrupp as a possible prey, but others said a hostile bid for the German steel group was unlikely because of its ownership structure.

Tokyo Steel Manufacturing Co., often seen as a potential takeover target, was up 2.33 percent in Tokyo at the end of trade on Monday. It is also reported that Nippon Steel executives have expressed some concern that their close relationship with Japanese carmakers may make them an attractive target.
Another sign of industry consolidation worldwide, Australia's second steel maker, OneSteel, on Monday agreed to buy smaller rival Smorgon Steel at a 31 percent premium for $1.2 billion.

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