E.U. Commission Plays Up to Mittal Steel
The E.U. Commission backed up the purchase of Luxemburg Arcelor by Britain’s Mittal Steel. Although Arcelor opposes the hostile takeover bid by Mittal Steel on hopes to take over Russia’s Severstal, Mittal Steel owner Lakshmi Mittal can force the partners to cancel the agreement. Lakshmi Mittal vowed Saturday he would buy the majority stake in Arcelor even after consolidation of the latter with the Russian company. Should it happen, Severstal would pull out of the deal, while its owner, Alexey Mordashov, would be paid ˆ140 million as penalty.
The E.U. Competition Commission was announced Friday to have approved the deal authorizing Mittal Steel to buy out Arcelor. It was the last sanction needed by the Britain’s company for the hostile takeover, as the regulatory bodies of Luxemburg, Belgium, Spain and the United States had OKed the deal before.
Arcelor management declined to comment on decision of the E.U. Commission, and spokesmen of the company apparently don’t favor the deal.
Regardless, Mittal Steel can stake on Arcelor holders that are not pleased with the terms of the deal with Severstal offered by the company’s management. On completion of that deal, Arcelor would own 89 percent in Severstal, while Alexey Mordashov would get from 32 percent to 38 percent in Arcelor.
An alternative extraordinary meeting of holders to amend the voting procedures and ultimately vote down Arcelor’s takeover of Severstal could be held June 21, according to sources of Interfax news agency. Under the Arcelor Charter, however, the takeover needs only the BOD authorization, which was granted May 26, a source close to the deal told Kommersant.
Lakshmi Mittal vowed Saturday his company may pay tens of billion dollars for the majority stake in consolidated Arcelor-Severstal. In this case, pursuant to the agreement of Arcelor and Severstal, Mordashov will have to pull out of the deal and get ˆ140 million as remedy.
www.kommersant.com
All the Article in Russian as of June 05, 2006
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