Severstal gives new twist to Arcelor-Mittal deal
In a new twist to the battle for Arcelor for whose takeover India-born steel tycoon L N Mittal reached a deal on Sunday, Russian steel giant Severstal on Monday offered to make a higher price for the company.
By PTI |
LUXEMBOURG: In a new twist to the battle for Arcelor for whose takeover India-born steel tycoon L N Mittal reached a deal on Sunday, Russian steel giant Severstal on Monday offered to make a higher price for the company.
London-based Mittal is paying $34 billion for 49.4 per cent ownership of the new entity, which will be rechristened Arcelor-Mittal with the NRI set to become its President. He had initially offered $29.6 billion which he sweetened in the face of Severstal's sudden tie-up with Arcelor for thwarting his bid.
Russian company Severstal said in a statement on Monday that it would present an improved offer at the June 30 Arcelor shareholders meeting, which is due to consider Mittal's bid.
"If a new offer for Arcelor was made for 100 per cent of its capital, the Board must discuss it," Arcelor Chairman Joseph Kinsch said at a news conference in the company of Mittal.
A furious Severstal said it was very surprised that Arcelor's Board did not invite it to discuss its revised offer and that it was it was reviewing its options.
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It was unclear whether Severstal would bid for 100 per cent stake in Arcelor, as the company had previously agreed to swap some steel assets for a stake in the Luxembourg-based company.However, Mittal, who addressed a press conference along with the Arcelor Chairman, said he was "very relaxed" about Severstal's fresh offer and he was sure that Arcelor's Board and shareholders would back his deal.
"Any partial bid will not be entertained by the company," he said.
His son Aditya, who is Chief Financial Officer of Mittal Steel, said that Russian offer must be rejected to keep the Arcelor-Mittal deal on track.
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Once the deal is approved by Arcelor AGM, Mittal would be the president of the new entity that would be three times bigger than its nearest rival, while incumbent Chairman Joseph Kinsch would continue in the position for an unspecified time, according to separate statements issued by the two companies.Kinsch said Arcelor CEO Guy Dolle, who had fought Mittal's bid hard, has offered to step down, a move that was predicted by many if L N Mittal succeeded in the attempt.
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The Arcelor chairman also said the company would honour all its existing contracts with Severstal, but not expand further businesses with it.He also said that Arcelor would pay 140 million euros to Severstal for breach of contract.
The new company would control nearly 10 per cent of global steel production, churn out 120 million tonnes of crude steel annually and employ 3,20,000 people, besides have a market capitalisation of $46 billion.
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