Posted on 02/01/2006 8:11:47 AM PST by CarrotAndStick
Dominique de Villepin, the French prime minister, reacting to Mittal Steel's hostile takeover bid for Arcelor, has renewed his call for economic patriotism to protect key industries from foreign predators.
"Economic patriotism is the mobilisation of all the participants, of all those concerned, the shareholders but also the company bosses," Villepin told France 2 television on Tuesday.
His comments came as European resistance mounted to the 18.6bn-euro ($22.7bn) bid by Mittal Steel, the world's biggest producer, to seize control of Arcelor, a steel group that is one of the continent's cherished industrial champions.
"Think about the structure of your capital, it should be sufficiently organised to resist attacks," Villepin said, addressing company directors and adding that "the state can help in this movement".
But the call for "economic patriotism" is being seriously challenged by Mittal's bid to swallow up Arcelor, which is not a French-only company, having been formed four years ago by the merger of three steelmakers - Luxembourg's Arbed, Spain's Aceralia and France's Usinor.
Arcelor warned against its predator's "irregular" profitability, pledging to consider "all options" to foil the hostile bid.
Competition grounds
Neelie Kroes, the European Competition commissioner, said on Tuesday she would examine the takeover bid "on competition grounds and on competition grounds only" and "not on any other ground".
The principal fear is that the Mittal deal could lead to plant closures and job cuts in the various European countries where Arcelor has plants.
Villepin has urged French firms to reorganise their capital
But Lakshmi Mittal, Mittal Steel Co's chairman and CEO, has opened up a charm offensive to calm government jitters over his $22.5 billion unsolicited offer for Arcelor SA.
On a visit to Paris on Monday, Mittal, 55, pledged to create a European champion, protect European jobs and respect European labour conditions.
Mittal said: "Mittal is committed to the social policies and commitments that Arcelor has implemented. Regarding employment, this merger is not about job reductions."
On Tuesday, the London-based steel boss was scheduled to meet Jean-Claude Juncker, the prime minister of Luxembourg, whose government is the largest shareholder in Arcelor with a 5.6% stake.
Juncker is also set to discuss the takeover bid at a meeting with Jacques Chirac, the French president, on Wednesday, when Mittal will meet Belgian authorities and the EU's competition commissioner to discuss his plans for Arcelor.
Third richest man
Mittal - ranked the third richest man on the planet by Forbes magazine - was speaking at a Paris news conference after meeting Thierry Breton, the French finance minister.
Breton said he had still to be convinced that a tie-up between the world's top two steel companies would be risk-free for France, where Arcelor employs 30,000 workers.
Arcelor is Europe's biggest supplier of high-grade steel
Mittal Steel had "no industrial plan on the table" to explain how the takeover would work, the minister said.
"Without any information at this stage, we can only reiterate our deep concern."
Mittal sidestepped questions about whether the deal could go ahead against government opposition. "I do not see the reason why the government will not accept this."
The takeover bid, announced on Friday, would create a new company with almost 350,000 employees at 61 plants in 27 countries, but with few areas of overlap that could cause anti-trust problems.
Mittal Steel is the biggest US supplier of high-grade, high-margin auto steel; Arcelor occupies the same position in Europe.
Agencies
Arcelor rejects Mittal Steel offer 1/30/2006 9:00:05 AM IST
In a move that could scuttle India-born Laxmi N. Mittal's plan to pull off the biggest deal in the global steel industry, Arcelor SA on Sunday rejected a US$22.70bn hostile takeover bid from his flagship, Mittal Steel Co. saying that the takeover would only hurt the company, its shareholders and its customers.
"The board has swiftly concluded that Arcelor and Mittal Steel do not share the same strategic vision, business model and values," Arcelor said in a statement issued after the Board meeting in Luxembourg. Arcelor asked shareholders not to tender their shares in the offer.
The combination of Mittal Steel and Arcelor would give London-based Mittal a hold on more than 10% of the global steel market, with annual revenues of approximately US$70bn. The announcement took many industry experts by surprise and fueled speculation of further consolidation in the steel industry.
To the French Unions: Welcome to the big leagues. You're about to get crushed by multinationalism as the idiot British unions did before you. Good riddance.
I agree.
Economic patriotism is the first refuge of the lazy scoundrel.
Imposing society wide costs resulting from inefficient use of productive capital has consequences, just not photogenic ones (like those of unions striking etc).
Doesn't this sound familiar ? When PepsiCo bid for Groupe Danone, didn't the frogs create a lot of noise.
Guy Dolle, CEO of Arcelor had this to comment about the quality of the steel that Mittal makes ...
"At a crowded press conference, he disparagingly referred to Mittal as a crude maker of "commodity steels", compared with Arcelor's output, which was the equivalent of eau de Cologne."
I wonder what the steel workers at Inland Steel have to say about this ?
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