Guy Dollé, the chief executive of Arcelor, the European steel maker, today vowed to fight last week’s surprise €18.6 billion (£12.7bn) takeover bid from Mittal Steel, insisting that he has had a plan in place for a year to thwart just such a hostile approach.
The comments came after Arcelor formally rejected the offer, which would create a company with output three times greater than its nearest rival. M Dollé last night said that the Arcelor board considered Mittal’s approach “150 per cent hostile”.
Speaking on Europe 1 radio station today, he added: “We were prepared for this attack since last spring. We are ready. We have a plan that enables us to resist.”
He continued: “The fight has begun, and we are going to win it.”
Advertisement
Mittal Steel, which is run by Laksmi Mittal, the Indian-born tycoon ranked by Forbes as the third-richest man in the world, is already the world’s largest producer by volume. It announced the surprise takeover bid for Arcelor on Friday. If the deal were successful it would mark the biggest merger ever seen in the steel industry.
However, news of the proposed deal has met with hostility from European business leaders and workers. Mr Mittal met in Paris today with Thierry Breton, the French Finance Minister, in a meeting aimed at to allaying fears his bid for Arcelor would lead to job cuts, telling a press conference that no cuts were planned.
M Dolle had earlier cautioned in a newspaper interview that the plan would have “dramatic consequences for shareholders and especially for workers”.
However, despite ruling out job cuts, Mr Mittal said that a takeover would generate annual economies of scale of $1 billion (£565m), with 60 per cent of that sum being reached in the first year. The company’s finance director, Aditya Mittal, said that a merged group would hit annual net profits of $7.2 billion.
M Breton said after his meeting with Mr Mittal that there had emerged no sign that “that the cultures of the two groups could function and live together” and no “analysis to know if the group that could result from the operation would have compatible governance systems.”
Advertisement
After a meeting of Arcelor board members yesterday, the group issued a statement saying that management “unanimously rejects the unsolicited bid from Mittal Steel which it considers to be hostile”.
The approach by Mittal Steel has also touched off negative reactions from politicians and union leaders in Belgium, Luxembourg and Spain, the main sites, together with France, of Arcelor plants in Europe.
However, in Brussels, a European Commission spokesman, Gregor Kreuzhuber, said that it would be wrong to revive protectionist or state-aid polices of the past.
In a statement from Arcelor last night, the company said it considered that “Arcelor and Mittal Steel do not share the same strategic vision, nor the same development model nor the same values.”
There has been disquiet from Europe over Mr Mittal’s approach and style. Maurice Lévy, one of France’s most prominent business leaders, yesterday told The Times that shareholders in Arcelor, which is based in Luxembourg and has extensive French operations, should be “very cautious” over the surprise hostile bid.
Advertisement
M Lévy also noted the role of leading British-based investment banks including the London operation of Goldman Sachs. “We see the skills and the aggression of some very good British bankers,” he noted.
If the bid for Arcelor goes ahead it will create the world’s first producer to make more than 100 million metric tonnes of steel a year, with a global workforce of 320,000 and 61 plants.
In opening deals on the Paris stock exchange today, shares in Arcelor rose 2 per cent to €29.15.