Arcelor Mittal won't sue trust over Dofasco unit
Arcelor Mittal, the world’s biggest steel company, won’t sue a Netherlands trust that’s blocking the sale of its Dofasco unit because it is unlikely to succeed.
By Agencies |
LONDON: Arcelor Mittal, the world’s biggest steel company, won’t sue a Netherlands trust that’s blocking the sale of its Dofasco unit because it is unlikely to succeed.
The Strategic Steel Stichting, a Netherlands trust to which Arcelor gave ownership of Dofasco to try to thwart a takeover by Mittal Steel last year, rejected a request to sell the Canadian steel unit in November. Mittal had pledged to sell Dofasco to Germany’s ThyssenKrupp if it bought Arcelor.
The boards of both Mittal and Arcelor decided not to sue “based on opinions from legal experts that the prospects for success of any such litigation against the Stichting are remote,” Luxembourg-based Arcelor Mittal said.
The company must sell either Dofasco or one of two mills producing tin-coated steel in Weirton, West Virginia, and Sparrows Point, Maryland, after the US justice department said in May that the merger of Arcelor and Mittal would hurt competition in tin-mill products in the eastern US.
“We are going to continue our course with our lawsuit,” Klaus Pepperhoff, a ThyssenKrupp spokesman, said. “Our hearing takes place tomorrow.” ThyssenKrupp expects a ruling in its Netherlands case against Mittal Steel, the pre-merger company that agreed to sell Dofasco, within 10 days of the hearing, Mr Pepperhoff said. The company’s suit calls on Mittal to force Arcelor to force the trust to surrender control of Dofasco.
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Arcelor Mittal “already said they would likely have to retain Dofasco and would proceed instead to sell Wierton,” Richard Brakenhoff, an analyst at Rabobank Securities, said by telephone from Utrecht, the Netherlands. “The only question now is whether US antitrust authorities think that selling Wierton is enough,” said Mr Brakenhoff, who rates Mittal shares a ‘buy’. ThyssenKrupp Access
Buying Dofasco would give Dusseldorf-based ThyssenKrupp access to North American customers and allow the building of a plant in Brazil to supply its mills with low-cost, semi-finished steel.
Arcelor bought Hamilton, Ontario-based Dofasco for C$5.5 billion ($4.8 billion) last March, outbidding ThyssenKrupp, and put the Canadian steelmaker into the trust a month later. In June, Arcelor agreed to a $38.3 billion takeover by Mittal.
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Dofasco would be worth 3.8 billion euros ($4.94 billion), Karl-Ulrich Koehler, the president of ThyssenKrupp’s steel unit, said in September. Shares of Mittal Steel fell 26 cents, or 0.8 per cent, to 30.70 euros as of 12:17 a.m. in Amsterdam. Arcelor’s shares slipped 29 cents, or 0.7 per cent, to 43.05 euros in Paris. Download
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