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Fighter Mittal wins Arcelor hand

London, June 25: Lakshmi Mittal tonight won his titanic five-month battle to merge Mittal Steel with Arcelor, though he has had to substantially improve the original offer he made when his hostile bid was first disclosed in January.

A spokeswoman for Arcelor told The Telegraph in London tonight that the board of Arcelor, which met at the headquarters in Luxembourg today, would recommend the merger to its shareholders.

Under the terms of the merger, the new company, which will create a steel behemoth, will be called Arcelor-Mittal.

The Indian-born tycoon will be president of the company, while the chairman’s job will go to Joseph Kinsch, who holds the same post on the board of Arcelor.

While Guy Dolle, Arcelor’s chief executive who had fought tooth and nail to oppose the merger ' he called Mittal Steel “cologne” to Arcelor’s “perfume” ' will be one of seven members on the new management team (four will be from Arcelor, three from Mittal Steel), it is unclear if he will also be chief executive of the new entity.

According to the spokeswoman, Mittal has had to improve his original offer by 49 per cent. Arcelor shareholders will hold 50.6 per cent of the equity in Arcelor-Mittal, while Mittal Steel shareholders will have 49.4 per cent. Of the latter, the shareholding by Mittal and members of his family will amount to 43 per cent ' in other words, he won’t immediately have controlling interest.

With hindsight it now seems when Mittal told The Telegraph on Friday that he was “confident”, he knew that the “corporate battle” had swung his way.

Dolle: On way out'

Mittal will have to make a fresh formal offer by July 5, though this date could be pushed back. There will be 11 Mittal shares for seven Arcelor shares. The cash value has been raised to 40 euros per share, up to a total payout of 8.5 billion euros, the Arcelor spokeswoman said.

However this is dressed up, today’s announcement represents a remarkable victory for Mittal who faced concerted hostility from the Arcelor management and from French and other European politicians when he first announced his bid.

It is unclear how the Russian steel giant, Severstal, will take defeat. As in a Bollywood movie, the bride has been snatched away just as the intended bridegroom was about to claim his conjugal rights.

It was the entry of the Russian firm on to the scene that turned the tide in Mittal’s favour. Many Arcelor shareholders rebelled against their management for agreeing to the merger with Severstal.

Arcelor-Mittal’s joint capacity will be well over 100 million tonnes a year. Mittal must reckon once he is in position, he will change things around a bit.

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