Shareholders of Mittal Steel Co. and International Steel Group approved Mittal's U.S. $4.5-billion acquisition of U.S. steelmaker ISG, which will make Mittal the world's largest steel maker.
Mittal immediately vowed to invest $1.5 billion in Europe in the 5 five years to cement its position.
"There will be significant capex (capital spending) in the next few years to solidify our position in Europe," Europe Chief Executive Roeland Baan said at a news conference in Rotterdam, adding that he expected Mittal to spend $1.5 billion over the next 5 years.
"Our internally generated cash-flow will be sufficient to fund our capital expenditure plans," said Chief Operating Officer Malay Mukherjee.
Earlier, in a show of hands, shareholders at an extraordinary general meeting in Rotterdam overwhelmingly voted in favor of Mittal Steel's plans to acquire ISG and merge it with other assets owned by Indian-born steel magnate, Lakshmi Mittal.
And in New York, ISG shareholders approved the deal in a lopsided proxy vote of 69.1 million in favor to 277,389 against.
"There will be more opportunities for consolidation," Mr. Mukherjee told reporters in Rotterdam after the shareholder meeting. He called the merger a "good strategic fit" and said Mittal's acquisition of ISG should produce "increased synergy opportunities."
In New York, ISG Chairman Wilbur Ross told shareholders the deal "will dramatically redraw the global steel map." He added: "However, if our industry is to approach the level of consolidation that is already present in industries we both sell to and buy from, then much more needs to be done."
The purchase of Richfield, OH, U.S.-based ISG is the final step in the bid by Mittal to surpass Europe's Arcelor as the biggest steel producer. The new steel giant was born in December when the magnate's LNM Holdings merged with Dutch-based company Ispat International NV. It began trading in December on the New York Stock Exchange and Euronext's Amsterdam bourse.
In February, Mittal announced it had quadrupled net income in 2004 on the back of a China-driven surge in steel prices and it forecast a stable market in 2005. Full-year net income rose to $4.7 billion from $1.2 billion, and revenue jumped 132 percent to $22.2 billion. (Reuters)
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