Investors approve huge steel deal

The merger will create one of the world's largest steel firms

Shareholders of three of the world's largest steelmakers have agreed a merger which will create a business with combined sales of $31.5bn.

The deal, uniting Dutch firms Ispat and LNM and US business International Steel Group, was spearheaded by Indian-born steel tycoon Lakshmi Mittal.

The Mittal family will own 88% of the newly created Mittal Steel, which will employ 165,000 workers.

The firm said it would look to expand its interests in China and India.

'Growing market'

Investors in the Netherlands and the US approved the $4.5bn takeover of Ohio-based ISG by the Mittal family, which will merge the business with its own Ispat International and LNM Holdings.

The new business plans to double production from its current level of 58 million tonnes and invest $1.5bn in modernising its European plants.

This process is likely to result in the loss of about 45,000 jobs over the next five years, mainly across eastern Europe.

Mittal Steel hopes to build on a recent foray into China, where it acquired a 37% stake in Hunan Vallin Steel Tube and Wire.

"There is a growing market there (China) and we will look at it from the point of view of adding value to the entire organisation," Malay Mukherjee, Mittal Steel's chief operating officer, said.

Lakshmi Mittal is among the UK's richest men. The Sunday Times claimed recently that he had a personal fortune of £14.8bn.