In a move to thwart Mittal Steel's takeover bid, Arcelor said on May 26 that it would buy Severstal, a Russian company. Arecelor has offered $15.3 billion. The merger would make Arecelor the world's biggest steel group.
Sales of the combined companies would reach $58 billion with production of 70 million tons.
"Arcelor's board of directors believes that the merger with Severstal fully recognizes the value inherent in Arcelor, and offers Arcelor shareholders superior industrial logic, greater value and the highest standards of corporate governance compared to Mittal Steel's offer" said Chairman Joseph Kinsch, Arcelor's board of directors.
The merger will give Arecelor a 20% global market share in the automotive steel sector which is double that of its nearest competitor according to a company statement.
Subject to regulatory approvlas, the transaction is expected to close in July 2006.