Steel deal: Arcelor gives in to Mittal

Stephen Beard Jun 26, 2006

TEXT OF STORY

[ In French, Joseph Kinsch announcing the deal ]

MARK AUSTIN THOMAS: That’s Joseph Kinsch the chairman of Arcelor announcing that one of Europe’s longest and most acrimonious takeover battles appears to be over. European steelmaker Arcelor has finally agreed to merge with the Indian-owned Mittal. From London, Stephen Beard reports.

STEPHEN BEARD: After five months of wrangling with the French president and the European Central Bank opposing the deal, Arcelor has finally succumbed to Mittal.

The Arcelor board has recommended that shareholders accept the improved offer of $34 billion. The combined group would be easily the world’s biggest steel company — three times the size of its nearest rival.

Steel customers won’t be celebrating, says analyst Patrick Flockhart:

PATRICK FLOCKHART: The carmakers and even people who make things like fridges and microwaves might not be too pleased because they’re going to be dealing with one great big company that’s going to be able to dictate price to those people much more strongly.

The deal could trigger a wave of similar mergers in Japan, South Korea and China.

Arcelor-Mittal meanwhile might sell off some American steelmaking operations to cut its exposure to the troubled US auto industry.

In London, this is Stephen Beard for Marketplace.

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