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Last Updated: Sunday, 19 March 2006, 20:24 GMT
Mittal outlines Arcelor deadline
Mittal chief executive Lakshmi Mittal
Mittal's boss says the steel industry needs to consolidate
Steel magnate Lakshmi Mittal is confident of gaining enough shareholder support to complete a hostile takeover of rival Arcelor by the end of June.

Mr Mittal has met shareholders, politicians and regulators in a bid to clear the way for the proposed 18.6bn euro ($22bn; 12.7bn) deal.

"Arcelor shareholders need Mittal Steel," he told BBC News.

The deal has been rejected by the Arcelor board and has been opposed by some politicians who fear job cuts.

Consolidation

Arcelor is the world's second largest steel company and employs 98,000 people worldwide.

A merger with Mittal Steel would create a company with about 10% of the world's total steel output.

"This deal is not about power or money, it is about the consolidation of the industry," said Mr Mittal, speaking on BBC Radio Five Live's Weekend Business programme.

"Consolidation means improving the sustainability of the industry."

He said the cyclical nature of the steel industry meant consolidation was needed for companies to survive downturns in the market.

He pointed to the second and third quarters of 2005, when the industry was able to withstand a soft market for steel because previous consolidation meant firms were able to cut down on production and allow inventories to run down.

Worker at Arcelor steel plant in eastern France
Mr Mittal has promised no Arcelor job cuts

Mr Mittal explained where Arcelor's problems lay, giving an insight into the case he was laying when trying to woo the company's shareholders.

Labour donation

"Arcelor's business is 80% in Western Europe, where growth is very flat or very small. They are in higher value products where margins are very low, and are not in higher growth markets like Central and Eastern Europe."

Mr Mittal said that he had promised shareholders that there would be no job cuts resulting from the merger.

He went on to refute claims that a donation he made to the Labour Party in 2001 was linked in any way to a letter that Prime Minister Tony Blair wrote supporting his deal to buy a state-owned Romanian steel firm.

"He wrote the letter after the deal was done," he said.




SEE ALSO:
Arcelor rejects call on bid talks
20 Feb 06 |  Business
Arcelor payout to woo investors
16 Feb 06 |  Business
Rising costs hit Mittal profits
15 Feb 06 |  Business
Mittal 'sad' about political row
01 Feb 06 |  Business
Belgium open-minded on Mittal bid
06 Feb 06 |  Business
Steel baron heads Asian Rich List
12 Mar 03 |  Business


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