'Severstal's deal with Arcelor is merger, not sale'
Russian steel producer Severstal's deal with the European steel group Arcelor is a merger, not an acquisition, Severstal's chief Alexei Mordashov stressed on Sunday.
By Agencies |
MOSCOW: Russian steel producer Severstal's deal with the European steel group Arcelor is a merger, not an acquisition, Severstal's chief Alexei Mordashov stressed on Sunday.
"For the first time in Russia's modern history our company becomes part of a global company, of the largest player in its field," Mordashov said as quoted by the RIA-Novosti news agency. "We're talking about a merger, not a takeover," Mordashov said, pointing out that the merger would make Severstal the new group's largest and "most important" minority shareholder, but said that he was unlikely to take up a key post.
"That would be taken badly by everyone involved in the process, employees, shareholders and the government alike," Mordashov explained. Under the terms of their merger, Arcelor is to buy Severstal in a $15.3-billion transaction but Mordashov would end up with a stake of 38 per cent in the merged company.
The merger is seen as a defensive move by Arcelor, which is trying to fend off a hostile takeover bid from Mittal Steel headed by NRI tycoon Lakhsmi Mittal.
Mittal has been trying to convince Arcelor shareholders to accept its 25.8-billion-euro takeover offer for Arcelor. It launched an international advertising campaign this week to convince them of the merits of its takeover plan. The management of Arcelor remains opposed to a takeover by Mittal, which is based in the Netherlands but has Indian origins.
"For the first time in Russia's modern history our company becomes part of a global company, of the largest player in its field," Mordashov said as quoted by the RIA-Novosti news agency. "We're talking about a merger, not a takeover," Mordashov said, pointing out that the merger would make Severstal the new group's largest and "most important" minority shareholder, but said that he was unlikely to take up a key post.
"That would be taken badly by everyone involved in the process, employees, shareholders and the government alike," Mordashov explained. Under the terms of their merger, Arcelor is to buy Severstal in a $15.3-billion transaction but Mordashov would end up with a stake of 38 per cent in the merged company.
The merger is seen as a defensive move by Arcelor, which is trying to fend off a hostile takeover bid from Mittal Steel headed by NRI tycoon Lakhsmi Mittal.
Mittal has been trying to convince Arcelor shareholders to accept its 25.8-billion-euro takeover offer for Arcelor. It launched an international advertising campaign this week to convince them of the merits of its takeover plan. The management of Arcelor remains opposed to a takeover by Mittal, which is based in the Netherlands but has Indian origins.
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