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Last Updated: Wednesday, 1 February 2006, 17:42 GMT
Mittal 'sad' about political row
Lakshmi Mittal, chief executive and chairman of Mittal Steel
Lakshmi Mittal has so far failed to convince Luxembourg and Paris
Steel magnate Lakshmi Mittal has said he has been "saddened" by the political backlash against his firm's proposed takeover of rival firm Arcelor.

The Luxembourg and French governments are opposed to the 18.6bn euro ($22.6bn; 12.7bn) bid by Mittal Steel.

Mr Mittal said Europe needed a stronger steel sector to compete with China.

As the row over the deal continued, Arcelor boss Guy Dolle said the deal would amount to a raid on its cash flow to fund the rebuilding Mittal's plants.

'Healthy merger'

Mr Mittal has struggled to convince leading European politicians about the merits of his firm's bid.

Speaking after meeting with French President Jacques Chirac, Mr Mittal insisted the merger would be "healthy" for both companies.

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

"I am not scared about the politicians' reaction," Mr Mittal said.

"I feel saddened about it."

"It is a process of educating and informing the politicians about the importance of this merger," he added.

On Tuesday, Luxembourg Prime Minister Jean-Claude Juncker said his government would oppose Mittal's hostile bid, which the Luxembourg-based firm has itself rejected.

French Prime Minister Dominique de Villepin has described the bid as "a very unfriendly offer".

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

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

Concessions

To try to assuage concerns about the proposed deal, Mittal Steel has said it would move its headquarters to Luxembourg and ensure strong independent representation on the combined company's board.

But Mr Dolle said money from Arcelor would be used to modernise many of Mittal's older plants in eastern Europe and the US if the takeover went ahead.

"Mittal has invested little in its plants," he told France's Radio Classique on Wednesday.

"It is better that Arcelor's cash flow goes to Arcelor shareholders via its own industrial projects."

Arcelor was created in 2002 from the merger of French, Belgian, Luxembourg and Spanish steel companies and has large workforces in each of the four countries.

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

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.


SEE ALSO:
Luxembourg against Mittal's bid
31 Jan 06 |  Business
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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