The world's second largest steel producer, Arcelor Steel of Luxembourg, has announced it will merge with the world's largest steel company, Netherlands-based Mittal. The deal, announced on June 25 still has to be approved by Arcelor shareholders. As VOA's George Dwyer reports, that move is considered likely after the firm's board voted unanimously to accept Mittal's offer of $32 billion.
The new company, to be called Arcelor-Mittal, is the result of a difficult courtship. Mittal Chairman Lakshmi Mittal fought for five months to complete the deal. Arcelor chairman Joseph Kinsch eluded to the strains at a news conference in Luxembourg Monday.
"I hope this marriage of reason will end up in a love marriage between our teams who will try to work as close as possible together," he said.
Mittal, who is the world's fifth wealthiest man, will become president of the new company. The merger makes him the global steel industry's star figure and champion matchmaker.
"As I said before, we have been trying to persuade the bride for the last five months that we love her and that she should accept our marriage proposal," he said. "And it took us about five months to persuade this bride which is very young. So, I hope this marriage is long lasting."
The merger creates a global steel-producing goliath, with 320,000 employees, controlling about 10 percent of the world market and turning out 116 million tons of steel a year. That is about triple the output of its nearest rival, Nippon Steel of Japan.
Arcelor executives were said to be hostile to Mittal's proposal at first, preferring instead a deal with Russia's Severstal Steel. Mittal sweetened his offer and made concessions on the form the new organization would take, finally beating out Severstal.
"Severstal tried to obstruct the process so I am happy that we could succeed," he said. "At the same time I have said we would like to maintain industrial relations between Severstal and Arcelor. We want to put everything behind and we are looking for better relation in the future."
In Russia, Severstal is feeling left out - complaining that Arcelor's board did not invite it to discuss the revised offer. The company says it is reviewing its options.