Just last week we talked about the wild bidding for Canadian steel maker Dofasco between Arcelor and German-based ThysennKrupp, a battle which Arcelor eventually (and perhaps pyrrhically) won. Well today, the world's largest producer, Mittal Steel (NYSE: MT) launched a bid for Arcelor:
While the bid for Arcelor caught the market by surprise, the steel industry has been consolidating rapidly in recent years and Mittal has been openly looking for acquisitions to increase its market share as demand from China and India rises.
The offer values Arcelor shares at 28.21 euros ($24.50) each, a 27 percent premium to Thursday's close. Trading in Arcelor's shares had been halted on the Euronext exchange ahead of the announcement but surged 35 percent to 29.97 euros ($36.71) when they resumed. Mittal's shares also were halted pending the announcement, and Dutch regulators said the stock would resume trading Friday afternoon.
And erstwhile loser ThyssenKrupp gets something out of the deal:
If the deal goes ahead, Mittal said it has agreed to sell Canadian automotive-steel maker Dofasco Inc. -- which earlier this week agreed to a $4.85 billion takeover by Arcelor -- to German-based steelmaker ThyssenKrupp AG.
Amid signs of price softening, and possible overcapacity, the industry seems to be moving incredibly swiftly to consolidate their hands. You can probably expect more of this, as rumors are that Mittal is looking to acquire some Chinese companies in the near future.
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