Mittal's bid revives Thyssen's hopes for Dofasco

ThyssenKrupp had earlier this week dropped out of the bidding after Arclor's C$5.6 billion ($4.9 billion) cash offer (See: ThyssenKrupp backs out, Arcelor wins Dofasco) only to return yesterday by agreeing to Mittal Steel's proposal to acquire Dofasco after the Arcelor take-over would be completed.

Confirming that Thyssen would acquire Dofasco if Mittal Steel's bid succeeded, the German steelmaker's chief executive Ekkehard Schulz told investors at the company's annual meeting in Düsseldorf, that Lakshmi Mittal, the chairman and chief executive of Mittal Steel, had contacted him after it dropped out of the race for the Canadian steel-maker on Tuesday to set out his plans.

Meanwhile, Arcelor has reacted by describing the bid as "hostile" and being made without prior consultations. Mittal, countered by saying that the two companies had been in talks for over 10 days.

Mittal sought to defuse opposition from Arcelor, describing his offer as an unprecedented transaction that would accelerate consolidation in the global steel sector and saying that both companies have been in the forefront of this consolidation and shared a similar vision for the future of the industry. He also said the two companies were a good fit with little geographical or product overlap.

Arcelor's board will meet on Sunday in Luxembourg to decide on its response to the bid.

Arcelor's share prices climbed 30 per cent yesterday on the news of Mittal's offer. It is also being speculated that Mittal would have to raise its bid to succeed.