Mittal eyes future acquisitions in India, China

London: Mittal Steel, the world's No. 1 steel company which agreed a 25.6 billion euro (.54 billion) deal to acquire rival Arcelor, has its sights set on further acquisitions in emerging markets such as China and India, its Chairman Lakshmi Mittal said.

''At this point, we will focus on China and India,'' Mittal told sources in an exclusive interview, when asked about the group's future acquisition strategy.

Mittal was speaking hours after Arcelor's shareholders rejected an alternative merger deal with Russian peer Severstal, clearing the way for a combination of the world's two largest steelmakers after a five-month bitter battle.

''We never expected it would be so difficult, with so many hurdles and obstacles,'' Mittal said at his office in London's upmarket Mayfair district during an interview with Reuters and Times Now, Reuters television joint venture with the Times of India.

The Mittal-Arcelor feud has been one of Europe's most politically fraught corporate battles as Arcelor, created from firms in France, Spain and Luxembourg, had previously gone through years of restructuring and job cuts.

Mittal, 56 and one of the world's five richest men, said the combined group would be ''at least five years ahead of competition'' and spur consolidation across the sector. ''It will also pave the way for other steel companies to take this sort of consolidation seriously,'' he said.

Despite the size of the deal, the group will control just 10 percent of the global steel market but it will be about three times the size of its nearest rival, Japan's Nippon Steel.

Mittal expects his group to benefit from China's policy to consolidate its mammoth steel industry, where companies such as Baoshan Iron and Steel dominate.

''We definitely want to increase our presence in China and ... we think that being the largest steel company in the world ... we should participate in that consolidation,'' he said.

Mittal declined to comment on the timeframe of acquisitions, saying Arcelor and Dutch-registered Mittal Steel would initially focus on integrating the two firms and driving cost savings.

EMOTIONAL OUTBURSTS

Arcelor fought Mittal's audacious bid with tactics including proposing a massive share buyback and a higher dividend. But what turned the tide against Arcelor was its plan to acquire Severstal, controlled by billionaire Alexei Mordashov, and give him a minority controlling stake in the new company.

That forced a rebellion from minority Arcelor shareholders, who on Friday formally rejected the Severstal plan.

Mittal will be non-executive president of the new company, and his family will control about 43 percent of the group. Arcelor Chief Executive Guy Dolle, most remembered for his acerbic put-downs and personal remarks against Mittal, will stay on until the group finds a new chief.

Speaking on Friday, Mittal said Dolle's attacks never swayed him from pursuing Arcelor.

''Personally, I never felt any of those feelings. I always termed them emotional outbursts. I feel sad about it, but it did not change my determination,'' he said.

As staff in Mittal's office sipped champagne in celebration of the victory, the biggest of its 50 takeovers, Mittal described the takeover battle as a boxing match.

''There were many occasions where we felt that we lost on points. And there was one occasion when I felt I was in the 10th round and I had been knocked out,'' he said, referring to Arcelor's surprise move to acquire Severstal.

Mittal, whose company has no business interests in India but has proposed a billion plant in the east of the country, said his victory would hopefully spur other Indian businessmen to seek ambitious targets overseas.

''People have told me that Indian people are seeing it as India versus Arcelor, not Lakshmi Mittal versus Arcelor. I understood that if I succeeded, this would give lot of confidence to Indian businessmen to go abroad,'' he said.

REUTERS