EU official strikes moderate chord on Mittal''s bid for Arcelor
14 February 2006
New Delhi: The European Union today tried to tone down the rising nationalist fervour aroused by Mittal Steel's take-over bid for rival steel maker, Arcelor SA, in which has the governments of Luxembourg and Belgium among its shareholders, saying it was against racial discrimination. The EU has stated that the issue should be treated only on commercial considerations.
David O'Sullivan, the European Commission's director general for trade, said, "The EU is of a clear view that nationality in such cases is not relevant and it should be decided according to the laws in place and commercial merits. "It is unfortunate that allegations of racial discrimination have crept in the issue," O'Sullivan added.
Echoing the views of EU's competition commissioner, Neelie Kroes, (EU Competition Commissioner attempts to calm hostility to L N Mittal's Arcelor bid) O'Sullivan however added that the EU would be concerned if there were any violations of competition rules and the take-over created a monopolistic market condition in Europe.
L N Mittal's Rotterdam-based Mittal Steel announce a 22.3 billion dollar bid for Luxembourg-based Arcelor, which would create a steel company with an output three times bigger than its nearest rival Nippon Steel of Japan. (See: Mittal Steel bids for Arcelor).
The bid sparked an outburst of nationalist outpourings across Europe with the governments of France, Luxembourg and Spain having reacted coldly to the news and objections from labour unions that worry over the consequence of the take-over leading to job cuts, since Arcelor is the third-largest employer in the region.
L N Mittal has been at pains to assure the European governments that jobs would not be cut have not cut much ice despite Mittal pointing out that all his operations in various countries had not resulted in retrenchment.
Union commerce minister Kamal Nath had earlier warned European governments against racist reactions to Mittal Steel's take-over bid for Arcelor. The issue is also likely to figure during French president Jacques Chirac's visit to India in March.