Friday, June 30 2006 17:21 Hrs (IST) - World Time -

Luxembourg: Arcelor SA Chairman Joseph Kinsch told shareholders today (June 30, 2006) that the board's five-month battle against Mittal Steel Co had been worth it as they readied to vote on an earlier planned merger with Severstal.

He said the Arcelor-Mittal takeover set a benchmark for the steel industry, revealing Arcelor's 'true value' on the stock market.

"We have created in five months more than euro 12 billion in value," he said.

"The battle was long and hard," he said.

"This defense allowed us to come out with the best solution for the group and the most value for shareholders," he said.

"The board had succeeded in seeing its proper value and its 'non-negotiable' industrial model recognized," he said. He said he wanted Arcelor-Mittal to be admired for its dedication to quality steel and high-standard work practices.

He rejected any suggestion that the Severstal deal was a tactic to block Mittal's offer and force the stakes higher, claiming the board had only been able to change its mind about Mittal after it discussed Mittal's detailed business plan early this month.

He also said a 50 per cent threshold to block the Severstal deal had been chosen because the board felt shareholders would mobilize if they were unhappy and the board was not trying to sew up its plans. It was unclear how many shareholders were represented at the meeting ahead of the votes.

Kinsch defended Arcelor's decision to merge with Severstal last month now overtaken by its planned union with Mittal agreed last Sunday saying the Severstal deal came "too late" and negative market reaction and the low profile of the Russian steelmaker had helped scuttle a merger.



"Arcelor made its best efforts to promote the Severstal project," he said.



He also defended the board's decision to place recent purchase Canadian steelmaker Dofasco Inc. in a Dutch trust to prevent it being resold by Mittal, saying there was no malice or intention to rob shareholders.



He said the board had carefully weighed offers from Mittal and Severstal over recent months.

"Each time during a number of meetings, your board examined (these) in detail with our only concern to develop Arcelor's model and the interests of all Arcelor shareholders," he said.