Two Indian TV channels reported that the new company would called Arcelor Mittal.

The channels, NDTV Profit and CNBC TV-18, cited unnamed sources for their reports and said that the papers would be signed shortly. Sources have said that Mittal is now offering 40.37 euros per share.

Trading in Arcelor shares has been suspended since last Wednesday, they were last quoted at 35.02 euros.

Arcelor board members on Sunday discussed whether to back a takeover by Mittal or a rescue deal with Russia’s Severstal.

There was no word from the 18 Arcelor board members. Sources said some were upset over the extent to which Arcelor representatives had negotiated with Mittal, an issue that had also divided Arcelor's management.

Joint chairmen

The two channels said Indian steel magnate Lakshmi Mittal and Joseph Kinsch, the Arcelor chairman, would be co-chairmen of the merged company.

Arcelor and Mittal have declined to comment on the reports.

Arcelor and Mittal held talks to end a five-month battle over Mittal's plans to acquire its rival and create a global giant with an annual output more than three times that of its closest competitor.

The board has twice rejected Mittal's cash and stock offer - now worth 25.8 billion euros - as inadequate and undervaluing the company.

Arcelor and Mittal are currently the world’s two largest steel producers.

Last month Arcelor proposed purchasing Severstal in a deal in which its majority owner Alexei Mordashov would buy a significant minority stake in the Luxembourg group.

Severstal improved the terms of its proposed merger on Tuesday, saying it would settle for a 25% in the combined group and arguing that it was offering to improve its original deal by two billion euros to Arcelor shareholders.