Mittal Steel formally launched its takeover bid for European rival Arcelor. 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 euros (US28 billion).
Stock market authorities in the those three countries, where Arcelor shares are listed, are to publish Mittal's offer on their Internet web sites early May 18, 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cash and share offer of 28.21 euros per share, with 75% in Mittal shares and 25% in cash, corresponds to a proposition originally made by Lakshmi Mittal on January 27 in London.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 May 17, Arcelor shares closed down 0.64% at 32.85 euros 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 tons 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.
Copyright Agence France-Presse, 2006