The take-over creates a steel giant three times larger than its nearest rival, with a turnover of 55 billion euros. Current head of Arcelor Joseph Kinsh confirms the deal.
“What has been retained between Mittal Steel and ourselves is that Arcelor’s industrial model will be applied in the future to the whole of the group which will be called Arcelor-Mittal”
The annoncement follows five months of wrangling, with some European governments including Luxembourg and France opposing the deal. But Luxembourg Finance Minister Jeannot Krecke is happy with the outcome.
“The biggest firm by far in the world in the manufacture of steel and to have its headquarters and centre of decision making here, I think its a good victory for us.” The deal is seen as a triumph of global business over economic nationalism. Sceptics fear that the merger will lead to job losses.
Mittal Steel argued that Europe’s largest firms needed to merge in order to compete with the US and Asia. Founder Lakshmi Mittal, the world’s third richest man, will be the president of the new group. He will gain control of 43% of the company. But sparks may yet fly, with Russian company Severstal claiming it already had a deal with Arcelor and that the Mittal take-over was illegal. Severstal is reportedly considering its options.