Mittal, Arcelor may be near peace deal
A friendly merger deal would forge the world's largest steel comapany, French newspaper reported.
By Agencies |
PARIS: The world's two biggest steel producers, Mittal Steel and Arcelor, are close to a merger agreement following months of tactical manoeuvring and sometimes bitter commentary, press reports said here Friday.
The French financial daily La Tribune said price was the only outstanding issue and that Arcelor chief executive Guy Dolle could go before the board with a proposal on Sunday.
A price of around 43 euros per share is now on the table, La Tribune said without identifying its sources, while the Wall Street Journal also quoted sources as saying that Indian steel tycoon Lakshmi Mittal was now ready to pay more than 40 euros per share for number two Arcelor.
The current offer of 36.04 euros per share valued Arcelor at 23.93 billion euros (30 billion dollars).
A price of 43 euros would be less than the 44 euros at which Arcelor has valued its own shares in a planned share buyback and in a merger agreement with the Russian group Severstal that aimed to thwart Mittal's bid. Arcelor shares were last traded at 35.02 euros before they were suspended on Wednesday pending more information on the status of merger talks with Mittal Steel and Severstal.
Now, Mittal might offer more cash, more Mittal Steel shares, or a combination of both, the Wall Street Journal said Friday.
On Thursday, the Financial Times had said that Mittal could raise his most recent bid by 3.0 billion euros.
Mittal's initial offer in late January valued the Luxembourg-based steelmaker at 18.6 billion euros in cash and Mittal Steel shares, which an Arcelor executive had dismissed as "Monopoly money".
The French financial daily La Tribune said price was the only outstanding issue and that Arcelor chief executive Guy Dolle could go before the board with a proposal on Sunday.
A price of around 43 euros per share is now on the table, La Tribune said without identifying its sources, while the Wall Street Journal also quoted sources as saying that Indian steel tycoon Lakshmi Mittal was now ready to pay more than 40 euros per share for number two Arcelor.
The current offer of 36.04 euros per share valued Arcelor at 23.93 billion euros (30 billion dollars).
A price of 43 euros would be less than the 44 euros at which Arcelor has valued its own shares in a planned share buyback and in a merger agreement with the Russian group Severstal that aimed to thwart Mittal's bid. Arcelor shares were last traded at 35.02 euros before they were suspended on Wednesday pending more information on the status of merger talks with Mittal Steel and Severstal.
Now, Mittal might offer more cash, more Mittal Steel shares, or a combination of both, the Wall Street Journal said Friday.
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On Thursday, the Financial Times had said that Mittal could raise his most recent bid by 3.0 billion euros.
Mittal's initial offer in late January valued the Luxembourg-based steelmaker at 18.6 billion euros in cash and Mittal Steel shares, which an Arcelor executive had dismissed as "Monopoly money".
According to La Tribune, Mittal has also now agreed to changes in his plans for Arcelor's management and the group's overall strategy.
Joseph Kinsch would remain the board president with Mittal as co-president, at least until Kinsch retires in April 2007, while Aditya Mittal, financial director of Mittal Steel and son of Lakshmi, would join other board members who were either independent or named by Arcelor.
Arcelor shareholders could even control more than half of the combined group and have majority representation on the board, the Wall Street Journal said.
One of Arcelor's initial arguments against a Mittal takeover was dominance of the group's management by the Mittal family.
On the industrial level, Mittal Steel would divest activities in Algeria, Serbia and South Africa, along with others in North America, though it would keep the Canadian Dofasco, which Arcelor acquired earlier this year. Mittal Steel would also focus on producing higher quality steel rather than basing its business model on quantity, which pushed it to the rank of number one worldwide in terms of volume.
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When Mittal first mooted a takeover of Arcelor, Dolle had denigrated the Netherlands-based group's products, saying: "They make eau de Cologne, we make perfume."
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