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Last Updated: Sunday, 29 January 2006, 18:03 GMT
Arcelor rejects Mittal Steel bid
Steel slab
The steel industry is consolidating rapidly
Bosses at steel maker Arcelor have rejected an 18.6bn euro (12.7bn) takeover bid from Mittal Steel.

A statement issued on Sunday said that the two companies did not "share the same strategic vision, business model and values".

Arcelor recommended its shareholders not to sell their shares to Mittal.

Mittal Steel, the world's largest steelmaker, approached Arcelor on Friday in an attempt to boost its share of the heavily fragmented steel sector.


Mittal is headed by Lakshmi Mittal, one of the UK's richest men with an estimated fortune of more than 15bn.

Arcelor shares rose more than 30% after Mittal Steel said it would offer 28.21 euros a share for the Luxembourg firm and would seek talks on a deal.

The bid comes as the steel industry is consolidating rapidly amid a fall in steel prices from their 2005 highs.

Prices rose rapidly in 2003 and 2004 but have slipped recently as demand for steel from China has cooled slightly.

Arcelor recently won a fierce bid battle to acquire Canadian firm Dofasco for 3.95bn euros (2.7bn) although Mittal Steel intends to sell Dofasco if its bid proves successful.

If the takeover attempt is succesful, it will create a giant steel firm with more than 250,000 employees and revenues in excess of $50bn.

It would produce about 10% of the world's total steel output.

However, the deal would probably face scrutiny from the European Commission and other competition authorities.

Market leader

Mittal Steel, which has headquarters in London and Rotterdam, was created in 2004 by the merger of three leading operators.

It has expanded rapidly since then, buying Ukraine's largest steel mill last year for 2.7bn and investing heavily in India.

It now operates in 14 countries.

Arcelor, for its part, has a presence in 60 countries and is market leader in Europe and Latin America.

Mr Mittal has hit the headlines in the past for making large donations to the Labour Party in the United Kingdom.

He gave 2m to Labour in July, one of its single largest-ever donations, following its third successive election victory.

Mittal Steel's shares rose 6.4% on the news of the bid.

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