Mittal announces bid for Arcelor-UPDATE-2

Mittal announces bid for Arcelor-UPDATE-2

Mittal Steel, the world's largest steelmaker, today announced that it has launched an offer for Arcelor, the world's second largest steelmaker, which would create the world's first 100 million ton plus steel producer. The offer launched by Mittal values Arcelor at an equity value of Euro 18.6 billion. The new company will have: – Unprecedented scale, scope and synergies – Pro-forma* 2005 annual revenues of approximately $69 billion and EBITDA of $12.6 billion (*IBES estimates) – Pro-forma market capitalization of approximately $40 billion – Leading positions in NAFTA, EU, Central Europe, Africa and South America – Expected synergies of $1 billion from purchasing, marketing and manufacturing efficiencies – Exceptional raw material resources with a high degree of iron-ore self sufficiency – Reduced volatility through geographic and product diversification – Security of long-term contracts through high value-added products – Low cost profile and high growth prospects from developing markets – Leading position across a range of key product segments – Ability to supply customers on a global basis - A dividend policy representing c. 25 percent of earnings over the cycle Under the terms of the offer, Arcelor shareholders will receive four Mittal Steel shares and Euro 35.25 cash for every five Arcelor shares (equivalent to 0.8 Mittal Steel shares plus Euro 7.05 cash for each Arcelor share). In addition, they will have the right to receive a cash or stock mix in any proportion they elect, provided that 25 percent of the aggregate consideration paid to Arcelor shareholders is paid in cash and 75 percent in stock. The maximum amount of cash to be paid by Mittal Steel will be approximately Euro 4.7 billion and the maximum number of Mittal Steel shares to be issued will be approximately 526.6 million, assuming the conversion of the outstanding Arcelor Convertible Bonds. Mittal Steel also announces today that it has entered into an agreement with Germany's ThyssenKrupp AG to resell to ThyssenKrupp all the common shares of Canada's Dofasco Inc that Arcelor purchases in its pending tender offer for Dofasco or later, at a price equal to the Euro equivalent of C$ 68.00 per share, adjusted based on changes in net financial debt and net working capital from the date of acquisition of Dofasco by Arcelor and the date of resale to ThyssenKrupp. Commenting on the subject Mr Lakshmi N. Mittal, Chairman and CEO of Mittal Steel said, “The last ten years have seen a major shift towards consolidation of the steel industry, helping to create sustainable value for all stakeholders. Both Mittal Steel and Arcelor have been at the forefront of this consolidation and share a similar vision for the future of our industry. This combination accelerates this process and leaves us uniquely positioned to benefit from the opportunities created.” “We believe the offer provides a very attractive premium and has been structured so that Arcelor shareholders have the opportunity to participate in the exciting growth potential of the combined company, whilst also receiving a generous cash element. We would encourage them to consider the merits of our compelling offer and play a part in the future of the world's only global steel company.” Upon this offer, Arcelor announced that it found the offer hostile since it took place without prior discussions or consultations between both companies. Arcelor's Board of Directors will meet to discuss the issue, the company sources reported.