Arcelor, Mittal call a truce for now

NEW DELHI: In another twist to the ongoing tussle between Arcelor and Mittal Steel, the two steel giants appear to have buried the hatchet for the time being and have agreed to sit down at the negotiating table.

When contacted by ET, Mr Sudhir Maheshwari, corporate treasurer, Mittal Steel, said: “Yes, discussions are ongoing and we hope these talks are in good faith.”

Though this was all he said, it nonetheless does signal a climbdown on the part of the Luxembourg-based Arcelor. Arcelor, only on Monday, had rejected the $33-bn hostile takeover bid by Mittal Steel. The only plausible reason for the negotiations appears to be that Mittal’s advisers may have given signals of raising the offer price.

The development also highlights a new tenor in Arcelor’s voice as, up to this time, it had refused to meet Mittal Steel officials who had first made the bid five months ago. Media reports suggest that the new twist to the tale follows a statement by Arcelor after a five-hour-long meeting by its board on Sunday at its headquarters.

These reports had also suggested that despite its length, the meeting was not contentious. If Arcelor finally signs a deal with Mittal Russian billionaire Aleksei Mordashov could be left hanging. Mr Mordashov agreed last month to exchange his stake in Russian steel group Severstal and other assets for about one-third of Arcelor.

These developments come in the wake of Europe’s monopoly authorities giving the go-ahead to the hostile takeover bid of Mittal Steel. The recent clearance, however, came with certain riders. In a statement announcing its decision, the European Commission had said that the proposed transaction would not give rise to competition concerns in Europe.

Arcelor, the world’s second-biggest steelmaker, has been battling hard to head off the bid from Mittal Steel, the world’s largest steelmaker, over the past five months.