Courts Allow Mittal to Hold Arcelor Merger EGM
Courts in Paris and Rotterdam ruled on Monday against injunctions lodged by Arcelor minority shareholders aimed at blocking a shareholder meeting needed to finalize the firm's merger with Mittal Steel.
Mittal's shareholder meeting on Tuesday is set to allow the steelmaker to become Luxembourg-based and later merge with Arcelor, which is also registered in the Grand Duchy.
The companies, which already function as a single entity -- the world's largest steelmaker -- aim to finalize the merger before the end of the year.
The Rotterdam court said it had not been proved that the merger would be negative for minority shareholders. The Paris court said it lacked the authority to rule on the case.
Arcelor minority shareholder groups previously said they planned court action in Luxembourg to stop the merger from going ahead.
Arcelor shareholders in 2006 accepted a 26 billion euros ($35 billion) buyout offer from Mittal Steel after an acrimonious takeover battle but investors representing 6% of the stocks decided not to tender their shares.
Mittal is now offering eight ArcelorMittal shares for seven in Arcelor to the minority shareholders, compared with the 11 for seven offered in last year's takeover. Minority shareholders argue the ratio is too low.
The Rotterdam court said in a statement that the minority shareholders can fight the second phase of the merger at a court in Luxembourg, where the merger will be finalized.
"There is no reason to expect that application of the Luxembourg law will lead to other conclusions," the Rotterdam court said.
Arcelor saluted the Rotterdam court decision. "We have always been convinced that the merger process is both fair and transparent," a spokesman for the steelmaker said.