Arcelor shareholders reject Severstal merger

Reuters has reported that steelmaker Arcelor's shareholders rejected a merger deal with Russia's Severstal today The action clears the way for an agreed $32 billion takeover by Mittal Steel.

Shareholders representing 57.94 percent of capital voted against the plan which, would have given Severstal's main owner Alexei Mordashov a key stake in the merged group. At least 50 percent of the capital was required to block the deal and allow Arcelor to join forces with Mittal to form a global steel giant three times larger than its nearest rival.

Originally hailed by Arcelor's board as salvation, the deal with Severstal became the prime obstacle to the company's present agreement with Mittal to join forces.

The vote clears the way for Indian-born billionaire Lakshmi Mittal to realize his dream of dominating the steel industry with a company that will produce about 10 percent of global output.