The expected merger between Mittal Steel and Arcelor is likely to be officially announced late Sunday evening, creating a steel behemoth with a total sales of over 55 billion euros with over 320,000 employees.The steel industry was closely following the developments as the Arcelor board of directors began its meeting Sunday morning in Luxembourg to decide on rival offers from Mittal Steel of Indian-born steel magnate Lakshmi Mittal and the Russian company Severstal.
However, Arcelor spokesman Luc Sheer discounted reports in the Indian television channels and websites of Indian newspapers that said the deal had been clinched. "Anything is speculation until the end of the board meeting and the publication of a statement."
The official statement is scheduled to be issued late Sunday evening.
Arcelor sources confirmed that all members of the board were present at the meeting.
"You will have decisions presented to you this evening," board member Fernand Wagner said as he arrived for the meeting.
Unconfirmed reports quoting Mittal's advisors said that his revised offer of 43 euros per Arcelor share had been accepted by the board which would now recommend accepting Mittal's offer to its shareholders on June 30.
Accepting Mittal's offer would leave Severstal in the cold, but would involve Arcelor paying 140 million euros to the Russian company for a breach of contract.
The reports say that the merged company will be called Mittal-Arcelor with Mittal Steel holding a 45 percent stake while Arcelor holding the remaining equity. The chairmanship of the merged company would be shared by Mittal and current chairman Joseph Kinsch. The majority of the new board's members would also be from Arcelor, the reports add.
However, there was no certainty whether Arcelor's chief executive Guy Dolle, who had publicly opposed Mittal's takeover bid, would continue in the post in the proposed new entity.
The merged company's annual production would exceed 100 million tonnes, more than three times the production of its nearest rival, Japan's Nippon Steel, and would amount to 10 percent of the global steel production.
Mittal's takeover bid, launched in January, provoked much political opposition in European capitals. It was feared that the takeover would lead to job losses, but Mittal moved quickly to publicly deny any such future plans.
Mittal has since travelled across European capitals, explaining his plans for the future of the merged company and allaying apprehensions at the political level. His efforts slowly led to lowering of political opposition to the bid and ensuring that economic considerations alone determined its fate.
Mittal's takeover bid had been supported by Indian Commerce and Industry Minister Kamal Nath who said his nationality or origin should not determine the fate of any such bid in a globalised world.
According to Mittal, European companies need to merge and consolidate in order to ensure their competitiveness at a time when Asian economies such as India were rising exponentially.
(IANS)
