Report: Steel magnate Lakshmi Mittal hailed a "seminal day" for the steel industry yesterday after reluctant rival Arcelor bowed to Mittal Steel's takeover bid to create a global giant.
The cash-and-stock offer values Arcelor at about €24.6 billion after Mittal shares fell 5.4 per cent to €23.95 in afternoon trading yesterday.
A proud Lakshmi Mittal told a news conference the combined group would not only be a leader in steel, spearheading a global consolidation in the resurgent sector, but also one of the world's top companies, ranked at number 40 in the Fortune 500.
Arcelor chairman Joseph Kinsch was less enthusiastic, describing the deal as a "marriage of reason", while saying he hoped it could turn into a marriage of love.
"We have been trying to persuade the bride for the last five months that we love her and she should accept our marriage proposal," the Indian billionaire responded.
On Sunday, Arcelor's board had ended five months of vehement opposition and accepted Mittal's improved offer to form a firm three times larger than its nearest rival.
But a jilted suitor could yet come between the pair. At least 50 per cent of Arcelor shareholders must first vote on Friday to reject a rival merger with Russia's Severstal, controlled by oligarch Alexei Mordashov.
Arcelor shares shot up 10 per cent when they resumed trading on Monday and were up 6.9 per cent at €37.45 by mid afternoon.
Arcelor was forced to the negotiating table after minority shareholders rebelled against the planned Russian deal.
On Sunday, after a nine-hour board meeting, Arcelor's directors unanimously accepted Mittal's improved offer, that Mr Kinsch said was a 10 per cent premium over its previous bid.
Guy Dolle, Arcelor chief executive, will stay on to help the combined company find a new chief.
Mittal chief financial officer Aditya Mittal, son of Lakshmi, said he expected the deal to close by mid-July. He said he would be on the management board but would not become chief executive. Arcelor is to nominate the new CEO.
Severstal insisted its tie-up with Arcelor was binding and said it was reviewing its options amid fury from the Russian government and politicians.
Arcelor and Mittal bankers said Friday's vote was crucial as a failure to block the Severstal deal would trigger an Arcelor share issue, creating difficulties for Mittal.
