The U.S. government on May 12 cleared Mittal Steel's controversial takeover of European rival Arcelor provided it sells off key assets such as Canadian steelmaker Dofasco. If the takeover goes ahead, the Department of Justice said the world's largest steel group would be obliged to sell Arcelor unit Dofasco to German company ThyssenKrupp.
Mittal Steel has already committed to selling Dofasco to ThyssenKrupp should it win control of Arcelor, which is bitterly resisting its hostile takeover. Among its defenses erected against Mittal Steel, Arcelor is considering transferring Dofasco to a foundation as a way of blocking the unit's sale to the German company.
"If Mittal acquires Arcelor but is unable to divest Dofasco, the agreement requires Mittal to divest certain alternative assets to a buyer acceptable to the department [of Justice]. The department has determined that the divestiture of either Dofasco or the alternative assets would address the potential competitive problem identified by the department."
In the U.S., Mittal directly operates 12 plants employing more than 10,000 workers. Arcelor is heavily focused on Europe, and before its February purchase of Dofasco had no manufacturing presence in North America.
In documents submitted to European governments, Mittal has said the two companies' operations are "complementary" and therefore almost no job cuts are expected.
Copyright Agence France-Presse, 2006