After a bitter five-month battle involving an Indian-born billionaire, a Russian oligarch and several European governments, Joseph Kinsch, the Arcelor chairman announced on Sunday his board had voted to accept Mittal’s revised cash-and-stock offer.
“In the end, it was decided unanimously by the Arcelor board that (it will) recommend the new offer by Mittal Steel,” Kinsch told reporters, adding that Mittal’s improved bid was a 10% premium over its previous offer.
The decision after a nine-hour board meeting represented a climb down by Arcelor’s management, which had cobbled together a white knight deal with Russia’s Severstal controlled by steel magnate Alexei Mordashov, to try to fend off Mittal.
Steel magnate Laksmi Mittal (R)
Amid mounting shareholder agitation against that idea, Arcelor entered talks this month to end the feud over Mittal’s unsolicited plans to acquire its rival and create a global champion with an annual output of more than 100 million tonnes.
“We have always sought a recommended merger in the interests of all stakeholders, we are delighted that is what we have now achieved,” a Mittal spokesman said.
The new company will be called Arcelor Mittal and will be based in Luxembourg.
Lakshmi Mittal, Mittal Steel founder and the world’s third-richest man, will be president, and Arcelor’s Kinsch chairman until he retires next year.
The Mittal family will hold 43.4% of the company.
“We have always sought a recommended merger in the interests of all stakeholders, we are delighted that is what we have now achieved”
The combined company will produce about 10% of the world’s steel and a total worldwide staff of 334,000, according to 2005 data.
The deal was a triumph for global business over economic nationalism.
The Russian company, which according to a source on Saturday secured a multibillion-euro loan facility from investment bank ABN AMRO to give itself fire-power, had no comment on the deal.