Mittal, Arcelor start talks

Putting behind it four months of acidic barbs and jibes about the world's largest steel maker Mittal Steel, its rival and second-largest steel maker Arcelor SA has finally got down to holding talks with it. Thus far it had been communicating with Mittal only in writing.

Mittal Steel has confirmed the commencement of talks with Arcelor, the first since it announced its bid to take over the Luxembourg-based Arcelor, on 26 January 2006. It also said that it had no intention of raising its bid for rival Arcelor, any further.

This is seen as Mittal Steel's response to a report in this morning's London-based Financial Times, which had suggested that Mittal may raise its existing bid of about €37.74 a share to €44 a share, bringing it on par with Severstal.

Mittal Steel's detailed post-merger industrial plan, handed over to Arcelor at its Luxembourg headquarters last week, helped kick-start talks between the two rivals. Mittal Steel hopes its blueprint would block Arcelor's proposed merger with Russia's Severstal, saying its bid would be more attractive to shareholders because of Mittal's larger global presence and operations.

So far, Arcelor has rejected Mittal's €21.5-billion acquisition bid. Instead to fend-off Mittal it announce its proposed merger with Severstal last month. Arcelor agreed to buy control of OAO Severstal from Mordashov shortly after Mittal's €23.7-billion bid formally began last month. 'The Severstal deal includes a purchase of Arcelor shares by Mordashov, giving him a total stake of 32 per cent in Arcelor.

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