Steelmaker Arcelor and Mittal – the company that is trying to take it over – have both announced lower quarterly profits. As it revealed the results Arcelor said it would be going ahead with buyback of as much as a quarter of its shares – at above the market price.
That is Chief Executive Guy Dolle’s latest weapon to fend off a takeover by larger rival Mittal. Between January and March Mittal’s turnover rose by 31% but its profit fell by 35%. Arcelor’s turnover increased by 17% but its profit was lower by 20% compared with the same period a year ago. But both companies performed better that steel industry analysts had expected.
As Mittal revealed its figures chief executive and founder Lakshmi Mittal said the US Justice Department has now given clearance for its bid for Arcelor and he hoped it would be cleared by European stock exchange regulators next week at which time the offer would be quickly put to shareholders.
The companies’ profits had fallen because steel prices are down and raw-material costs such as iron ore and coking coal have surged. However Arcelor said demand and prices are getting better. And Mittal was also optimistic about prospects for this year saying it expects the recovery to continue supported by improvements in the Asian market.