Arcelor to weigh Mittal's all-cash bid

New Delhi: The Luxembourg-based Arcelor has agreed to consider an all-cash takeover bid by Mittal Steel.

Arcelor Chief Executive Guy Dolle said in comments to the French daily Le Figaro that Arcelor would consider an all-cash bid by Mittal Steel.

The Netherland-based Mittal Steel, owned by Lakshmi Mittal had offered 18.6 billion Euros in cash and shares to Arcelor in a move which would create a steel giant with output three times bigger than its three nearest rivals combined.

Lakshmi Mittal is confident he will succeed in his bid. "We are a European company - Dutch-based European company - and Arcelor is also a European company. So I really do not agree, I do not agree that there is any difference in managing it."

Meanwhile, in a step forward in his bid to buy Arcelor, Mittal has said three banks will lend him 8 billion Euros to finance the bid.

At a press conference in London, he said he was not willing to raise his bid price.

The controversy surrounding steel tycoon LN Mittal's bid for Arcelor will now loom over French President Jacques Chirac's visit to India, when he lands in New Delhi next week.

The steel baron already has an important ally in India's Commerce and Industry Minister. Kamal Nath has virtually put Mittal's bid for takeover of Arcelor down to European racism. But his colleague and Minister of State for External Affairs, Anand Sharma, is in no mood for a diplomatic battle

"This is purely a business thing. Those who believe in free trade and also the freedom of entreprenuers to invest or set up business enterprises, they should respect that. That's all we have to say. It's nothing to do with broader national policy," says Sharma.

Reports suggest India could pull the plug on a proposed tax treaty with Luxembourg to teach the EU a lesson. But the Europeans don't believe they deserve to be punished.

"It is a matter of commercial importance among the shareholders of the company," explains David O'Sullivan, Director-General of Trade at the European Commission.

As the political posturing continues, the matter is perhaps summed up best by S K Pillai, an Indian bureaucrat.

"Some ministers have made their views known on the position. It is not a matter for the Indian government to take a view on, either ways," he says.