Arcelor Mittal eyes AK Steel of US

NEW YORK/BRUSSELS: Arcelor Mittal, the world’s largest steelmaker, is looking to acquire AK Steel, the Financial Times reported on its Alphaville website, triggering a surge in AK Steel shares.

Shares of Ohio-based AK Steel rose to $39 before the closing bell in New York from a close at $32.06 on Monday. FT Alphaville, which did not cite its sources or say how many people confirmed the report, said a deal could value AK at up to $40 per share, or just under $4.5 billion.

“We don’t comment on market speculation,” said Arcelor Mittal spokesman Jean Lasar. An analyst covering Arcelor Mittal who declined to be named said he doubted Arcelor Mittal would go ahead with such a deal, pointing out possible anti-trust issues. “I see little chances of that happening,” he said.

A European investment banker who follows the steel sector agreed and said an acquisition could raise competition concerns in the flat carbon market for the automotive industry in North America. Arcelor Mittal previously committed to divest its US steel plant at Sparrows Point to address US competition concerns after it decided to keep Arcelor’s Canadian unit Dofasco within the new merged group formed by Mittal’s acquisition of Arcelor.

“They already have to sell Sparrow Points to close the Arcelor takeover. Do you think they could do this one?” the banker asked. Arcelor Mittal shares fell 2.2% to 41.50 euros in Paris. AK Steel reported more than $6 billion in sales in 2006. In its first-quarter earnings release, AK Steel said net earnings were $62.7 million.