Tata's outsmart Mittals in SA acquisition

By agencies   |   Thursday, 18 May 2006, 13:39 IST
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NEW DELHI: After an intense battle of nerves, the world's cheapest steel-maker Tata has outrun the world's biggest steel-maker Mittal in the race to acquire South Africa-based Highveld Vanadium and Steel. Mittal Steel is understood to be close to shelving plans to acquire Highveld after its takeover plans failed to impress that country's competitions tribunal. Lakshmi Niwas Mittal's well drawn up plans to acquire Highveld to become the biggest steel-producer in the country did not go down well with the tribunal, which brought "forth some procedural difficulties," informed sources said here. The Indian-born steel baron is already under fire from the tribunal for indulging in alleged unfair trade practices and is reportedly keen not to soil its image any more and hence was actively considering pulling out of the race. "This leaves Tata Steel as the lone and major contender, albeit with another lesser-known South African firm in the fray, to acquire Highveld. Since the very beginning, the Tatas have been silently but meticulously making efforts to take on the Mittals," sources said. "The issue is likely to dominate the Tata board meeting in Mumbai tomorrow," they said and pointed out that a major decision on the matter by the board could not be ruled out," Tata Steel sources said. However, Tata executives were unavailable for comment prior to the board meeting as a formal announcement was expected tomorrow. Problems have been mounting for Mittal Steel as the National Union of Metal Workers of South Africa (NUMSA) has thoroughly opposed the "unfair dismissal" of their leaders and chairperson in Mittal Steel. A senior NUMSA activist also expressed concern on restructuring at the Mittal Steel's Newcastle plant during the past five years resulting in hundreds of workers and NUMSA leaders losing their jobs. NUMSA has alleged that Mittal has forced the Union workers and its local chairpersons to take attractive retrenchment packages and were again re-employed as casual workers with no benefits and were also forced to surrender Union leadership and even membership. Mittal Steel is also reported to be contending with the South African taxmen who have rejected its objection to slapping a tax of $1.3 billion of Mittal steel South Africa on payments to the parent company Mittal Steel, sources said. However, these downturns have not weakened the company's resolve to invest nearly two billion Rands in the coming year as part of a nine billion Rand expansion program, they added.