The European Competition Commissioner, Neelie Kroes, today stepped in to soothe frayed nerves and the hostile nationalist sentiments that have greeted Mittal Steel's open offer to acquire Arcelor SA.
Kroes has stated that the European Commission would evaluate the offer purely on grounds of competition. Mittal Steel's offer was greeted with shock and outrage not only by Arcelor's board but by European politicians. The French an and some governments, as Arcelor is a major employer in Europe.
She said that she was not concerned by the size of the merger, but would examine the bid "on competition grounds and on competition grounds only."
Kroes assured members of the European parliament that the offer would probably be referred to the competition Commission, Europe's competition regulator and would be looked into very carefully.
The French and Luxembourg governments have expressed deep concern about the implications arising out of the take-over bid for employment and investment.
He flew to Luxembourg for a meeting with Jean-Claude Juncker, prime minister of Luxembourg, where he assured the PM that all commitments made by Arcelor would be honoured. Mittal described his today's talks as "constructive".
The government of the Grand Duchy of Luxembourg is the largest shareholder in Arcelor with a 5.6 per cent stake and Arcelor is the third-largest employer in Luxembourg.
Yesterday, was in Paris to meet Thierry Breton, French finance minister to assuage fears that his bid for Arcelor would lead to job cuts, after which he said at a televised press conference that no job cuts were planned Mittal
Mittal has lined up meetings with Belgian prime minister Guy Verhofstadt and is expected to fly to Spain as well on his mission to reassure the respective governments on job cuts as European labour unions seem to be gearing up for a showdown.
Mittal Steel also said that it saw no significant competition issues arising from its bid, either in Europe or in America, as the new combined entity would have almost 350,000 employees at 61 plants in 27 countries.
On Sunday the board of directors of Arcelor, which met in Luxembourg, rejected the take-over offer made by Mittal Steel, saying that it would hurt the company, shareholders and customers of Arcelor, which is the second-largest global steel company.
The board said that it had concluded that Arcelor and Mittal Steel do not share the same strategic vision, business model and values.
In a statement after the board meeting, Arcelor asked shareholders not to tender their shares in the offer. Arcelor chairman Guy Dollé had that Mittal Steel's plan would have "dramatic consequences for shareholders and especially for workers". Commenting on the wave of hostility fuelled by Mittal's offer for Arcelor, The Times (London) said, "The response to that bid was full of noxious nationalism and very light on logic. Mr Mittal's bid, one of the most tangible signs yet that globalization works in all directions at once, should be judged not on the nationality of the bidder but on the worth of the bid. India is no longer the permit-ridden economic laggard that, for many decades, it was. The country is growing at rates that are already not far off those of China."
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