Sale of Dofasco to ThyssenKrupp blocked: Arcelor Mittal
Monday, 13 November 2006, 20:30 IST
Printer Print Email Email
Luxembourg: The Dutch foundation, Strategic Steel Stichting, has blocked the proposed sale of steel maker Arcelor Mittal's Canadian subsidiary Dofasco, Arcelor Mittal said on Monday. Arcelor Mittal, the world's largest steel maker with capacity of around 130 million tonnes, had planned to sell Dofasco, which provides high-quality steel to the motor industry, to Germany's ThyssenKrupp. Strategic Steel Stichting, which holds the shares of Dofasco, had decided on Nov 10 not to dissolve the foundation, which would have permitted the sale, Arcelor Mittal said. Arcelor Mittal was set up earlier this year following an initially acrimonious takeover battle initiated by Mittal. Arcelor finally agreed to the terms and a merger was agreed late June. The merged company is to be formally established next year. Before the deal was struck, Arcelor had placed the shares of Dofasco, which it bought in early 2006 for 3.6 billion euros ($4.6 billion), in the foundation as a defensive strategy to block the takeover. Arcelor Mittal said it was reviewing the situation and would contact the US department of justice regarding the situation. ThyssenKrupp has for some time shown interest in Dofasco, engaging in a bidding war with Arcelor for the company in late 2005. It was reported to be offering Arcelor Mittal around 3.8 billion euros for Dofasco. If the sale is blocked, Mittal may be forced for competition reasons to sell its two other steel plants in North America, one in Maryland and the other in West Virgina. At the time of the merger with Arcelor, Mittal indicated it would seek to sell Dofasco, even though Arcelor's board was initially opposed to this. With Lakshmi Mittal now controlling 94 percent of the merged company and since last week occupying the position of chief executive as well as president of the board, analysts said the Arcelor board had "little say" in the matter.
Source: IANS
siliconindia