Severstal confident on Arcelor merger deal- Paper

Paris, June 15: Russian steel maker Severstal is confident its merger with Arcelor will go ahead, a French newspaper reported on Thursday, as speculation mounted Arcelor could open up to a friendly deal with Mittal.

Luxembourg-based Arcelor and Mittal Steel, the world's two largest steel companies, have started talks, Arcelor said on Wednesday, more than four months after rejecting Mittal's overtures which led Arcelor to agree to a tie up with Severstal.

''It is not a blow below the belt ... The talks are about Mittal Steel's industrial plan which shareholders have been insisting on,'' Alexei Mordashov, Severstal's owner, told Le Figaro newspaper in an interview published on Thursday.

''We have a contract with Arcelor and talking to Mittal does not mean it's being violated,'' he said.

In the past week a shareholder rebellion has been brewing at Arcelor over concerns about who would ultimately control the company.

Arcelor has urged shareholders to accept the 13 billion euro Severstal deal.

Mordashov would take 38 percent of shares in the combined company, become a non-executive president of the board and have the ability to appoint six directors to the board.

Mordashov told le Figaro that information about the deal had been scarce but that it hoped to clarify the situation at a meeting next week with investors.

One Arcelor source told Reuters on Tuesday that the meetings with Mittal might produce an increased offer. Mittal rejected this, saying it could make further improvements to the corporate governance component of the bid, but not the price.

''Today the pressure is on Mittal,'' Mordashov told Le Figaro, adding that if Mittal raised its offer it would not have any impact on the Arcelor-Severstal agreement.

Reuters