Mittal Presents Arcelor Takeover Plan

Posted 15 March 2006 @ 07:26 pm EET     Print     Reprint     E-Mail     Comments

BRUSSELS, Belgium (AP) - Mittal Steel Co. on Wednesday presented the Luxembourg government with plans for the proposed takeover of its rival Arcelor SA.

A statement from the Luxembourg government said it would "study and evaluate the plan on a technical level, taking into account economical, financial and social aspects."

Luxembourg-based Arcelor has rejected Mittal's unsolicited euro18.6 billion (US$22.2 billion) offer as hostile, saying it would hurt the group, its shareholders, employees and customers. The bid has also been opposed by the Luxembourg government, which is Arcelor's largest shareholder with a 5.6 percent stake.

However the country's Treasury Minister Luc Frieden insisted Luxembourg was not resorting to economic protectionism to defend Arcelor from its Netherlands-based rival.

"I do not think that by closing our borders to foreign investors we strengthen the European economies," Frieden said in a speech. "This does not mean that we must automatically welcome all offers of takeovers merely by the fact that they come from abroad."

He said offers should be judged by "their effects on the target company from a social, industrial and financial perspective."

Frieden said proposed changes to Luxembourg's legislation governing company takeovers were not designed to block the Mittal bid.

Luxembourg does "not think that takeover bids should be made possible or impossible by legal provisions," he told a conference of the Association of the Luxembourg Fund Industry.

"The task of the law should be to give a clear legal framework," Frieden added. "The Luxembourg draft law on takeover bids is drafted in this manner and will keep Luxembourg as an attractive place to host international companies."