Russia's image not a factor in Arcelor deal- Putin

MOSCOW, July 12: Russian President Vladimir Putin said on Wednesday that steel maker Arcelor's rejection of a merger with Severstal was a business decision that did not reflect on Russia's image abroad.

''This is a matter first and foremost for shareholders,'' he told French television channel TF-1 in an interview published on the Kremlin's official Web site, www.kremlin.ru.

Arcelor shareholders this month rejected a proposal to merge with Severstal, clearing the way for a billion takeover by Mittal Steel that will create a global steel giant three times larger than its nearest rival.

''Shareholders will grasp whether or not Arcelor made the right decision in a few years,'' Putin said.

He said Severstal was a completely private company and had already acquired a steel maker in Italy.

''So there's no cause for talking about some sort of image (of Russia). It's simply about business interests,'' he said.

Several Russian politicians, including Industry and Energy Minister Viktor Khristenko, criticised Arcelor's decision at the time, saying it showed anti-Russian bias in international markets.

Severstal, majority owned by Alexei Mordashov, Russia's seventh-richest man, owns the country's second-largest steel plant in the city of Cherepovets as well as Lucchini SpA in Italy and steel assets in the United States.

''It's a transparent, fast-growing company with very good relations with Arcelor,'' Putin said.

REUTERS