Mittal to make its case to French government

23rd February 2006, Comments 0 comments

PARIS, Feb 22, 2006 (AFP) - European steel maker Arcelor suffered a setback in Turkey on Wednesday, an unfortunate development for the group on a day when its predator, Mittal Steel, appeared to make inroads with the French government.

PARIS, Feb 22, 2006 (AFP) - European steel maker Arcelor suffered a setback in Turkey on Wednesday, an unfortunate development for the group on a day when its predator, Mittal Steel, appeared to make inroads with the French government.

Arcelor had been hoping to buy 20.5 percent of Turkish steel group Erdemir in a deal with Turkish industrial group OYAK, but OYAK announced on Wednesday that their agreement had been abandoned.

Meanwhile, French Economy Minister Thierry Breton said that Mittal Steel, which unveiled a hostile takeover bid for Arcelor in January, would outline detailed plans of its intentions for Arcelor to the French government at the beginning of next week.

Mittal Steel, the world's largest steel producer, launched a surprise 18.6-billion-euro hostile bid for Arcelor on January 27. But it has since faced criticism, particularly from the French government, about its failure to present an industrial plan for the takeover.

Breton told the French parliament that the presentation of detailed proposals would enable officials from the finance ministry "to pose all of the questions ... that we must ask to defend the national interest".

Arcelor was formed in 2002 by a merger of French steel group Usinor with Spanish group Aceralia and Luxembourg's Arbed.

A source close to the deal between OYAK and Arcelor told AFP that the takeover battle for Arcelor had been a factor in the decison by OYAK to end the arrangement.

OYAK, which controls the Turkish army's pension fund, had been "troubled by the takeover offer by Mittal for Arcelor," the source said.

In a statement issued by OYAK earlier, the group said that the agreement with Arcelor had been scrapped because of time constraints to complete the acquisition of Erdemir.

But Turkish media reports suggested that OYAK-Arcelor tie-up collapsed because of concerns it would be vetoed by Turkey's anti-trust regulators.

OYAK agreed to buy 46.12 percent of Erdemir, the biggest steel group in Turkey, in a privatisation sale by the Turkish state in October.

OYAK in December entered into an exclusive sales agreement with Arcelor in December and had planned to transfer 20.5 percent of Erdemir to the European group for about one billion euros.

OYAK said Wednesday it had still not received an opinion from Turkey's Competition Board about whether the deal with Arcelor would be permitted.

But the Turkish group added that cooperation with Arcelor might be possible after the acquisition of Erdemir is completed.

"OYAK and Arcelor are considering whether to continue their talks and explore opportunities of cooperation in various realms after the purchase of Erdemir's shares is completed," OYAK said, adding that no agreement had yet been reached.

Arcelor said that it would continue to build its presence in Turkey.

Copyright AFP

Subject: French news

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