Arcelor SA (Luxembourg) released a document detailing its proposed merger with Russia's Severstal.
Alexey Mordashov will contribute his steel and mining assets and his economic interest in OAO Severstal, as well as 1.25 billion euros (approx. U.S. $1.58 billion) cash. Arcelor will issue 295 million new shares, representing approximately 32 percent of Arcelor’s enlarged share capital.
Arcelor said it and Severstal are complementary both from a geographical and an industrial standpoint.
"The combination of high value-added products and highly competitive production facilities in the combined company will create the world’s leading steel producer and one of the most profitable players in the steel industry, with high resilience to the steel cycle and improved positioning to continue to develop in a consolidating steel industry," Arcelor said in a statement.
It remains unclear how Mittal Steel Company N.V. will proceed with its own plans to acquire Arcelor. Mittal made its first offer for Arcelor in January 2006 and last week received clearance from the European Commission for the acquisition.
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