Steel firms Arcelor, Mittal near agreed deal-paper

LONDON/PARIS, June 23 (Reuters) Mittal Steel and Arcelor are close to agreeing a merger that would end a five-month hostile bidding war and forge the world's largest steel firm, French newspaper La Tribune reported on Friday.

After 10 days of intense talks, the two sides just have to negotiate the final price to be paid for Arcelor after steel magnate Lakshmi Mittal gave ground on corporate governance and industrial strategy, the paper reported in its Web edition.

Arcelor Chief Executive Guy Dolle, who has backed a merger with Russia's Severstal to block Mittal Steel, could recommend a Mittal deal to the company's board on Sunday, the paper said.

Ahead of that Arcelor board meeting, Mittal Steel, Severstal and Arcelor itself all placed newspaper advertisements.

''Arcelor shareholders, vote 'No' to the forced Severstal merger,'' Mittal Steel said in its Financial Times advert, which included a cut-out-and-keep copy of the voting form to be used at Arcelor's extraordinary shareholder meeting on June 30.

For its part, Severstal said it was pleased with the ''high level of support expressed for our transaction'', which it said was ''extraordinarily compelling'', a choice of words building on Lakshmi Mittal having often described his offer as ''compelling''.

Arcelor put an advert in Belgian papers L'Echo and Le Soir which asked: ''Is it better to be everywhere or there where it matters?'' and said a tie-up with Severstal would be better than with Mittal Steel as it would place Arcelor in key economies.

REUTERS CS PM1325