Monday, June 26 2006 13:26 Hrs (IST) - World Time -

Luxembourg: Mittal Steel would hold 49.5 per cent in the world's largest Steel entity Arcelor-Mittal being created as a result of the acceptance of Mittal's takeover bid by European steel giant Arcelor last night.

"Following completion of transaction and assuming a 100 per cent acceptance rate of the tender offer by Arcelor's shareholders, current Arcelor shareholders will own collectively 50.5 per cent shares of the combined group.

"The Mittal family will own 43.6 per cent of the capital and voting rights of the combined group," Mittal Steel said in a statement immediately after Arcelor Chairman Joseph Kinssch announced the decision of his Board to unanimously accept the Mittal Steel offer and recommend the same to its shareholders.

Merger of the top two steel giants would give tremendous leverage (both in terms of size and market share to the resultant entity Arcelor Mittal which would be more than three times the nearest rival Nippon Steel).

Mittal Steel's revised offer represented an 82 per cent premium over the closing price and all time high on Euronext Paris of Arcelor on January 26, the last trading day before the announcement of its initial offer.

Under the terms of the revised offer, shareholders of Arcelor would receive 13 Mittal Steel shares and 150.60 euros in cash for 12 Arcelor shares.

Mittal Steel is also offering to acquire Arcelor Convertible Bonds in a mixed offer of 13 Mittal Steel shares and 188.42 euros in cash for 12 Arcelor Convertible Bonds, it said in a statement.

Arcelor-Mittal would have a unique profile with unprecedented scale, scope and synergies, says Mittal Steel.

According to Mittal Steel statement the new entity would hold number one position in the global steel industry with steel making capacity of 120 million tonnes.

The combined entity's annual revenues would be 71.9 billion dollar as of 2005 and a market capitalisation of approximately 46 billion dollar. Commenting on the merger, Lakshmi N Mittal, Chairman of Mittal Steel said: "I am delighted that Mittal Steel and Arcelor have agreed to merge. This is one of the greatest days in the history of Mittal Steel and a seminal event in the steel industry that will shape its future.

"Arcelor is an exceptional company with world class assets and highly regarded management. I want to take this opportunity to express my gratitude to all of our employees, shareholders and business partners for their support throughout this process of creating the best steel company in the world," he said.

"The combination was a natural alliance that represented a transformational change towards realising our vision of a more sustainable and stable industry benefitting all stakeholders. It is a winning combination between the two complementary companies, creating the industry leader that would create significant value for the shareholders, Mittal reasoned.

Arcelor-Mittal, headquartered in Luxembourg, will be listed in New York, Paris, Madrid, Amsterdam, Brussels and Luxembourg.