Mittal Steel says it's close to buying reluctant rival

June 24, 2006|By BLOOMBERG NEWS

LONDON -- Mittal Steel Co., owner of the Sparrows Point steel mill in Baltimore County, said yesterday that it was close to buying Arcelor SA, an agreement that would end a five-month struggle and lead to the biggest steel-industry merger.

"Talks are ongoing and constructive" and some parts of the offer "in principle have been agreed," said Sudhir Maheshwari, Mittal's managing director for business development and treasury.

The two companies planned to continue talks today, Maheshwari said. Luc Scheer, a spokesman for Arcelor at its headquarters in Luxembourg, declined to comment. Arcelor's board is scheduled to meet tomorrow.

Arcelor Chief Executive Officer Guy Dolle, after months of resistance, is moving closer to Mittal, the world's largest steelmaker, as shareholders object to a defense strategy that includes an agreement to combine with Russian steelmaker OAO Severstal.

Mittal wants to buy Arcelor to cut raw material costs and increase bargaining power with customers to create a steelmaker three times bigger than any rival.

The deal, if it goes through, could result in the sale of the Sparrows Point complex to settle antitrust issues.

The Sun reported this month that representatives from German steelmaker ThyssenKrupp AG toured the Baltimore steel plant last month and showed interest in buying it.

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