Mittal: I will create a European champion

By Dana Spinant

Date: 09/02/06

Lakshmi Mittal, the boss of the world's biggest steel company, is promising the EU's leaders that his bid to take over the rival Arcelor will create "a competitive European champion".

Mittal, whose hostile takeover bid for Arcelor has been fiercely criticised by the governments of France, Luxembourg and Spain, said: "If we do not have a large European company, we will not be able to stand against producers [and] exporters such as China. We have to defend, to protect our jobs, make the industry stronger."

In an interview with European Voice, he said that those European politicians who were preaching "economic patriotism" should see that a combined Mittal Steel and Arcelor would serve their aim.

"What do you want out of this economic patriotism? A strong European company, a strong European champion. This is the merger of two European companies: no job cuts, better future, better product, more investment."

Indian-born Mittal said that he understood the nationalistic feelings, which could hamper the consolidation of the sector. "I don't want to blame anyone, but all the countries have been very proud of the steel industry, it has always been a state enterprise and it was not only an important employer but it played an important role in the economy. It has been linked to defence...but I think people are now moving away from that feeling.

"If you look at Eastern European countries, they have privatised the steel companies and they allow foreigners to come in and buy them."

Observers point out that Mittal's bid for Arcelor could be motivated by the intention to get rid of a rival predator, whose intervention in takeover bids could push up the price. "That's the negative way of seeing it. The positive way is consolidation," Mittal said.

Seeking the confidence of trade unions, which are anxious to preserve Arcelor's "social dialogue" culture, Mx`ittal said: "We are the number one steel company in at least nine countries. Everywhere there are unions, social dialogue with unions, society and the community. We are very much involved with the society, we build health-care centres and sports centres.

We assure everyone that we will have social dialogue with the unions' leadership and with the society in those regions."

Mittal promised there would be no redundancies following the merger of the two companies: "We will honour all commitments that Arcelor made in terms of employees, growth, investment. I am also sure there will be no job cuts."

Peter Scherrer, general secretary of the European Metalworkers' Federation (EMF), said his union was against the hostile takeover. "I am sceptical because even though we have members in the Mittal plants, Mittal has never been in touch with the European associations," he said.

Gregor Kreuzhuber, spokesman for Günter Verheugen, the enterprise commissioner, said: "Legally speaking there is just one field of EU competence on this and that is competition policy.

"But of course, the commissioner is interested in a possible takeover in an important strategic sector like this. It would further consolidate the sector and we would be interested if it could promote production, create jobs and increase investment in Europe."