Sunday, February 26 2006 11:09 Hrs (IST) - World Time -

London: Despite European steelmaker Arcelor's opposition to his US$ 22.1 million takeover bid, NRI steel tycoon Lakshmi Mittal has expressed confidence that the deal would go through and the combined group could grow up to 150 to 200 million tonnes per annum.

"I am very confident that we will be able to convince all the stakeholders - the shareholders, the governments and the employees, that this is in their best interests," Mittal said, according to a report in 'The Observer' today (Feb 26,2006).

"I believe that most of the management would like to work in an enlarged entity with larger responsibilities, and would like to be part of a big European global company," he said.

But what of Guy Dolle, Chief Executive of Arcelor and his executive colleagues, who are still rejecting his overtures? Mittal said: "There could be some fallout in some places, which is natural, if they are confrontational. In a merger like this, four or six people may go away because they do not like to work with Mittal Steel.

"But I am sure that when the deal is concluded we will be able to create a best-in-class team combining the managements," he said.

Asked whether he could work with Dolle, Mittal said, "I have said that everything is on the table. He has to work out what he wants. From our side, we are open to discuss everything."

Asked if he believed that the company would grow beyond a 100 million-tonnes-a-year level, Mittal said, "Certainly there will be the opportunity for the combined group to grow. It could go up to 150 million or 200 million tonnes per annum."

55-year-old Mittal, the third richest man in the world, said, "Personally, I have not experienced any racist feeling in the past few weeks. But there have been comments from the Arcelor side in the media that have made me sad."

"They became very emotional about the whole thing," he said, adding "I will give them the benefit of the doubt. It was an initial outburst. I am sure that everyone regrets these kinds of outburst."

Now, he said, "They have realised that they should talk about the deal. This is a merger of two European steel companies."

Mittal said the industrial and financial logic is unassailable behind the takeover bid. In a relatively fragmented industry for what is a globally traded product, "the 115 million tonne a year giant that it will create a company larger than the next three largest combined will derive such economies of scale, geographic reach, and have a spread over such a range of products and markets that investors must say yes," he added.

"We have met between 50 and 60 per cent of Arcelor's shareholders. A majority of them said the management (led by Chief Executive Guy Dolle) should meet us."

However, Arcelor has remained on the offensive. It has contrasted its own 66 per cent profits rise with Mittal's 28 per cent fall.It said there are no synergies to the deal because there is no overlap, and that merging the high-value products made in its western European factories with Mittal's 'low-grade' metal did not represent the consolidation he claimed, but 'value-destroying' amalgamation.