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Mittal, Arcelor merger not to affect India venture
BS Corporate Bureau in New Delhi | June 26, 2006 12:43 IST
Last Updated: June 26, 2006 12:48 IST
The euro27.5-billion merger of the world's two largest steel companies, Mittal Steel and Arcelor SA, is unlikely to impact the former's plans to invest $9 billion in its first greenfield project in ore rich Jharkhand.
Mittal Steel signed an agreement with the Jharkhand government last October to pump in $9 billion into a 12-million tonne project -- the second largest FDI in the steel industry -- following South Korean firm Posco's $12-billion investment plan for Orissa.
Reacting to media reports that Mittal Steel and Arcelor are close to an agreement on the merger proposed by Mittal Steel Chairperson L N Mittal in January, Mittal Steel Jharkhand Pvt Ltd Chief Executive Sanak Mishra said the merger would have no bearing on the Jharkhand project.
"This is a commitment made by Mittal Steel by signing a memorandum of understanding and the merger is unlikely to impact these plans in any manner. The merger is likely to restrict itself to agreements on overall business plan, shareholding patterns and board structure, and the Jharkhand project is not on the agenda," Mishra said.
"It is a big opportunity for us in India and the latest development will not change that," he added.
Though there were reports that the newly-merged entity was likely to be renamed as Arcelor Mittal, the name of the Indian arm of the company would remain unchanged as it was already incorporated as a separate company, Mishra also said.
One of the conditions put by the Jharkhand government on Mittal Steel while signing the agreement was that a new company would have to be floated for the project.
Mittal Steel then formed Mittal Steel Jharkhand Pvt Ltd with an office in Ranchi and its corporate headquarters in New Delhi.
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