Mittal stands by bid for Arcelor

Mittal Steel chief executive Lakshmi Mittal said on Thursday that opposition to his hostile takeover bid for European steelmaker Arcelor could not weaken the “industrial logic” of his plan which would protect, not destroy, European jobs.

“There will be no job cuts arising out of this merger in Europe — this is in the interest of jobs in Europe,” Mittal said here.

Mittal’s son Aditya Mittal, company chief financial officer, countering what he termed “misinformation”, said that key shareholders and institutional investors “have expressed support” and that discussions were imminent to win over other shareholders in Arcelor.

Mittal Steel says that the plan, if successful, would generate economies of scale of $1-billion (€827-million) a year, of which 60% would arise in the first year.

Aditya Mittal said: “They [key shareholders] appreciate the industrial logic, they like the value creation.”

He also attacked criticism of the bid. France said on Wednesday that it opposed a takeover and Luxembourg has taken a similar line, although Britain has distanced itself from what it terms “protectionist” reflexes.

Aditya Mittal said: “There is a campaign of misinformation which is going around … I’m not going to get involved.”

“We have respect for Arcelor and its management team.”

Lakshmi Mittal, who is on a European charm offensive, said: “We appreciate the neutral role the Spanish authorities have taken. I am going to thank the ministers for their understanding.”

Mittal, of Indian origins and ranked as one of the richest people in Britain, repeated one of his main arguments, saying that his company did not plan any factory closures or job cuts and would respect existing investment programmes.

Mittal said: “It (the bid) has taken the French government by surprise. I understand their concern about jobs.”

Mittal Steel, the biggest maker of steel in the world by volume, has offered €18,6-billion ($22,7-billion) for Arcelor, the second-biggest producer, formed of a merger of steel interests in Luxembourg, France and Spain.

Mittal was to meet Spanish Economy Minister Pedro Solbes and Arcelor shareholders in Spain later. Arcelor employs 15 000 people in Spain.

Earlier, Mittal had met the leading industrial official from the northern steel-producing Asturias region, Graciano Torre, who asked for reassurances about the future of people employed by Arcelor in Spain.

Mittal recounted: “I assured him about jobs.

“We very much want to assure the employees there will be no job cuts.”

The bid by Mittal would create by far the biggest steel group in the world, accounting for 10% share of global steel production.

Aditya Mittal, addressing concerns that economies of scale would put at risk the livelihoods of Arcelor’s 96 300 employees, said that there were few overlaps between the activities of the two groups and that Mittal Steel had “an excellent record in developing business”.

Arcelor chief executive Guy Dolle has accused Mittal of trying to get its hands on Arcelor’s cashflow of more than €3-billion a year to finance the rebuilding of old mills in eastern Europe and the United States.

Aditya Mittal observed that if people did not believe in Mittal’s mission they would not be buying into Arcelor shares, which have risen by about 30% since the takeover bid was announced last week.

Spanish unions denounced the move on Arcelor, the product of a three-way merger four years ago between Aceralia of Spain, Usinor of France and Luxembourg group Arbed. Luxembourg has the biggest single shareholding of 5,6%. Belgium, which is adopting a cautious stance, owns 2,3%. – AFP

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