Mittal formally launches Arcelor bid

Unfazed by stiff opposition to his takeover bid, Non-Resident Indian steel tycoon Lakshmi Mittal on Thursday made his formal offer for acquiring the rival steel company Arcelor, which provides a chance for shareholders to determine the Luxembourg-based company's future.

Mittal Steel is offering about $23.2 billion cash and its own shares for Arcelor, having received regulatory clearance for the bid from watchdogs in Belgium, France and Luxembourg earlier this week.

The offer is open until June 29. Regulators have said that the result will be announced on July 13.

The offer for Arcelor opened in Luxembourg, France and Belgium. It is expected to open in Spain and the United States shortly, a Mittal Steel release said.

If successful, Lakshmi Mittal will create a global giant worth about $40 billion, employing 320,000 people and producing around 10 per cent of the world's steel.

Arcelor board has rejected the offer and has urged shareholders to preserve the company's independence. It has promised to increase 2005 dividend and a 5 billion euro share buyback at a price above the market level in a bid to convince them to reject the bid.

Commenting on the offer Lakshmi Mittal, chairman and CEO of the company said: "Since our offer was first announced the market has demonstrated that it likes the strategy of the deal through the considerable value created. We have always said that it is the shareholders who should decide on this transaction and we are pleased that now that the offer is open they will have ability to do so."

"We continue to believe that our offer is a very attractive one, structured to enable Arcelor shareholders to participate in the exciting growth potential of the combined company, whilst also receiving a generous cash element," Mittal said.

"The combined company will create the only steel company with a broad and compelling geographic footprint, well diversified product portfolio, unique cost position and ample captive raw material sources. We are confident shareholders will find great appeal in this model, whose strong growth profile will underpin superior shareholder returns."

Under Mittal's offer, Arcelor shareholders receive four Mittal Steel shares and 35.25 euros for every five Arcelor shares. The maximum amount of cash paid would be 25 per cent of the offer value.

Since the bid was mooted in January, the Arcelor board and its chief executive Guy Dolle have expressed fierce opposition and have taken measures to thwart the takeover.