Arcelor vows to resist Mittal's hostile takeover bid

Jan 30, 2006, 10:29 GMT

Paris - Arcelor head Guy Dolle vowed Monday to resist the hostile takeover bid from Mittal Steel as Lakshmi Mittal arrived in Paris to defend his offer for the world's second-largest steelmaker.

'We have been preparing for this attack since last spring. We are ready. We have the means with which to resist,' Dolle told Europe 1 radio.

'We have known for a year that (Mittal) is interested in us,' Dolle added. 'The battle has begun, and we will win it.'

His statement came just moments before Mittal sat down with French Finance Minister Thierry Breton to lay out his strategy and defend his 18.6 billion euro (22.7-billion-dollar) bid against charges that, among other claims, it would lead to massive layoffs in France, where Arcelor employs some 27,000 people.

On Sunday, the board of the Luxembourg-based steelmaker formally rejected the hostile takeover bid, which Mittal Steel launched last week.

Arcelor announced the rejection on its website late Sunday after an extraordinary board meeting in Luxembourg.

It said the board under the chairmanship of Joseph Kinsch had examined Mittal Steel's unsolicited proposal and concluded that 'Arcelor and Mittal Steel do not share the same strategic vision, business model and values.'

The board 'unanimously' rejected Mittal Steel's unsolicited and hostile proposal, recommended that shareholders not tender their shares into the proposed offer and mandated management to present proposals on how to counter the bid.

Mittal is the world's biggest steelmaker and Arcelor the second-biggest. A takeover would create the first company with production above 100 million tons a year and around 10 per cent of global steel production.

Mittal, which announced its bid Friday, has its headquarters in Rotterdam but is managed from London. Arcelor was created in 2002 out of Luxembourg's Arbed, Spain's Aceralia and the French company Usinor.