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Tuesday, October 26, 2004
Business in Romania blog
Lakshmi Mittal, who is based in the UK, yesterday set his seal on the consolidation of the global steel industry with a $17.8bn (£10bn) double merger to create the world's largest producer. Ispat Steel, where Mr Mittal has a 77% holding, is reversing into his family's privately held LNM Group and at the same time buying America's International Steel Group.

Ispat is paying $13.3bn in shares for LNM as part of a package that will see the selling shareholders, which include the Mittal family, pick up a one-off dividend of $2bn. Meanwhile, Ispat is offering cash and paper for ISG, which values the US group at around $4.5bn.

The deal will leave the Mittal family with an 88% holding in the new entity that will be called Mittal Steel.

The group, which will have a market capitalisation of about $21bn, will have an annual production capacity of some 70m tonnes - outstripping the world's current leader, Acelor.

Last year LNM, Ispat and ISG produced 48.8m tonnes of steel, according to the International Iron and Steel Institute.

"We are changing the entire world steel map," said ISG chairman Wilbur Ross. The formation of Mittal Steel would create the same sort of change in the global steel industry that the creation of ISG, which includes assets of companies such as Bethlehem Steel and Weirton Steel, had done in the US, Mr Ross said.

Mr Mittal was equally upbeat. "We are creating a new global powerhouse in the steel sector," he said. Mittal Steel will employ some 165,000 people in 14 countries in North America, Asia, Europe and Africa.

Mr. Mittal also is the owner of the ISPAT SIDEX Steel company in Galati, Romania and of TEPRO company in Iasi, Romania.

Posted by Mihai Botea : 10/26/2004 01:03:00 pm Mittal to create largest steel company
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