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Mittal, Arcelor may reach merger deal
June 23, 2006 20:24 IST
After steadfastly resisting Mittal Steel's hostile bid since January, rival Arcelor looks closer to agreeing to the takeover, as the two sides held discussions that were described as advanced and constructive.
"Talks are ongoing and constructive" and some parts of the offer "in principle have been agreed," Sudhir Maheshwari, Mittal's managing director (business development and treasury) told Bloomberg on Friday.
The two firms will continue talks on Mittal's $30 billion offer on Friday and Saturday, amid speculations that Mittal is all set to clinch the deal, company sources said.
Arcelor chief executive officer Guy Dolle, who had in the past tried to fend off Mittal's hostile bid, is believed to be moving closer to Mittal as shareholders objected to a strategy that envisaged an agreement to combine with Russia's Severstal.
Arcelor's board is scheduled to meet June 25.
Mittal wants to buy Arcelor to cut raw material costs and increase bargaining power with customers to create a steelmaker three times bigger than any rival.
Shares of Mittal rose 30 cents to 26.29 euros in Amsterdam. Shares of Arcelor are suspended in Paris pending clarification on its talks with Mittal and Severstal.
Mittal might increase its bid by 3 billion euros, the Financial Times said, citing people familiar with the deal. That would value each Arcelor share at 40.62 euros.
The Arcelor CEO, who is in New York, demanded a higher bid from Lakshmi Niwas Mittal, thereby indicating that he may yet favour an agreement.
Arcelor has valued its accord with Severstal at 44 euros a share.