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Last Updated: Tuesday, 31 January 2006, 17:11 GMT
Luxembourg against Mittal's bid
Luxembourg Prime Minister Jean-Claude Juncker
Jean-Claude Juncker has not welcomed Mittal's approach
Luxembourg Prime Minister Jean-Claude Juncker has confirmed that his government is opposed to a takeover of steel firm Arcelor by rival Mittal.

Mr Juncker made the comments after talks with Mittal boss Lakshmi Mittal.

Luxembourg-based Arcelor has already rejected Mittal's 18.6bn euro ($22.6bn; 12.7bn) hostile bid, and the French government also says it is concerned.

Paris is worried about the possible impact on Arcelor's 28,000 French staff, despite assurances from Mittal.

Outright opposition

"We held pleasant talks with Mr Mittal this morning, but he did not provide plausible explanations nor a clear industrial concept," Mr Juncker told the Luxembourg parliament on Tuesday.

Lakshmi Mittal, chief executive and chairman of Mittal Steel
Lakshmi Mittal has so far failed to convince Luxembourg and Paris

He added that his government, which is the single biggest stockholder in Arcelor with 5.6% of shares, "does not want Mr Mittal's takeover".

Arcelor, Luxembourg's largest private employer, has strongly criticised Mittal's hostile approach, claiming the two businesses and their cultural values are incompatible.

Its chief executive, Guy Dolle, has said he is adamantly opposed to the deal, which he has described as a "bit ridiculous".

EU talks

Anglo-Dutch Mittal is the world's largest steel company.

ARCELOR FACTS
HQ in Luxembourg
94,000 employees
Shipped 44m tons in 2004
Revenues of 30bn euros

Its proposed takeover of Arcelor would create an industry giant, accounting for about 10% of the world's total steel output.

To try to assuage concerns about the proposed deal, Mittal Steel has said it would move its headquarters to Luxembourg.

MITTAL STEEL FACTS
HQ in Rotterdam/London
175,000 employees
Shipped 42m tonnes in 2004
Revenues of $22bn

European Union anti-monopoly chief Neelie Kroes said she was not in principle opposed to a large steel merger and would meet with Mr Mittal later this week.

Ms Kroes added that she had not received a formal request by either company to look at the deal, but that if and when that happened she would carefully look at the matter in line with EU competition rules.

Mittal's bid comes at a time when a sharp fall in steel prices has led to increased consolidation in the industry.

Prices dropped about 30% in the second half of 2005 as demand from China - which drove prices upwards in 2003 and 2004 - eased slightly.

Analysts said there was a lot fight ahead for Arcelor and Mittal.


SEE ALSO:
Mittal makes French jobs pledge
30 Jan 06 |  Business
Arcelor rejects Mittal Steel bid
29 Jan 06 |  Business
Britain's heavy metal billionaire
27 Jan 06 |  Business
Mittal Steel unveils Arcelor bid
27 Jan 06 |  Business


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