Mittal Steel Co. NV announces agreement with Arcelor

June 26, 2006

Mittal Steel Company NV today announced that it has reached an agreement with Arcelor to combine the two companies in a merger of equals to create what the company says will be the world's leading steel company. Mittal Steel's revised offer reportedly is worth 25.6 billion euros ($32.2 billion). The terms of the transaction, which will be effected by way of a tender offer by Mittal Steel for Arcelor shares, have been reviewed by the Arcelor Board, which is recommending the transaction to Arcelor shareholders.

The combined group, to be domiciled and headquartered in Luxembourg, will be named Arcelor Mittal.

Following completion of the transaction and assuming a 100 percent acceptance rate of the tender offer by Arcelor shareholders, current Arcelor shareholders will own collectively 50.5 percent of the combined group. The Mittal family will own 43.6 percent of the capital and voting rights of the combined group.

Announcing the news, Mittal Steel said that Arcelor Mittal will have a unique profile with unprecedented scale, scope, and synergies:

  • No. 1 position in the global steel industry with steelmaking capacity of 120 million tons
  • Pro-forma 2005 annual revenues of US$71.9 billion and EBITDA of US$13.3 billion
  • Pro-forma market capitalization of approximately US$46 billion
  • Leading positions in NAFTA, EU, Central Europe, Africa and South America
  • Expected synergies of US$1.6 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
  • Best-in-class corporate governance structure promoting the Arcelor model
  • Financial strength to support continued investments and growth initiatives
  • A dividend policy representing c30% of earnings over the cycle

It is expected that, as a result of the amendment to the terms of the offer, the closing date for the tender offer, currently scheduled for July 5th, will be postponed by a few days. The new date for the closing of the tender offer will be communicated to the market after approval by the relevant market authorities.

More information can be found here.



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