Mittal Steel is to formally launch on Thursday a takeover bid for European rival Arcelor that would create the undisputed world champion of steel groups.
When trading begins on the Belgian, French and Luxembourg stock exchanges, Arcelor shareholders will have a chance to exchange their equity for Mittal shares and cash via an offer that currently values Arcelor at €22-billion ($28-billion).
Stock market authorities in the those three countries, where Arcelor shares are listed, are to publish Mittal’s offer on their websites early on Thursday, with Spanish officials expected to follow suit soon.
The offer runs until June 29 in all four nations. The cash and share offer of €28,21 per share, with 75% in Mittal shares and 25% in cash, corresponds to a proposition originally made by Lakshmi Mittal on January 27 in London.
On Wednesday, Arcelor shares closed down 0,64% at €32,85 on the Paris stock exchange, while the CAC 40 index of leading shares lost 3,18%.
Market authorities in Brussels, Luxembourg and Paris said that Mittal’s published offer would be accompanied by “a reply that Arcelor must publish for the duration of the offer’s acceptation period”.
That response is to include the recommendation of Arcelor’s board, which has five days to officially make its position known.
Since the bid was mooted in late January, the board and its chief executive Guy Dolle have repeatedly expressed fierce opposition and have taken several measures aimed at thwarting a takeover.
Mittal, however, is determined to merge the two biggest steel groups in the world to create an entity that would produce 110-140 tonnes of steel per year and tower over Japanese and Chinese rivals.
If the takeover goes through, Mittal/Arcelor would control roughly 12% of the global steel market and probably work towards further consolidation in the highly fragmented sector.
Perspectives for further concentration are particularly promising in China, India and Eastern Europe. – AFP