ROTTERDAM, the Netherlands (AFP) - Dutch-Indian steel group Ispat International announced that it had agreed to merge with Dutch LNM Holdings and US International Steel Group to form the world's largest steelmaker, which would be known as Mittal Steel.
For 2004 Mittal Steel expects revenues of over 30 billion dollars (24 billion euros) and a production capacity of 70 million tons annually. The company also expects a pro-forma operating income on 6.8 billion to 7 billion dollars and earnings per share of up to 7.40 dollars per share.
Mittal Steel will have operations in 14 countries and employs 165,000 people.
At the moment the world largest steel company is European Arcelor.
Mittal Steel will be created in two steps. Ispat International, the world's 11th largest steel producer based in the Netherlands, will initially acquire LNM Holding, also based here.
Ispat and LNM Holdings already form part of the LNM Group, an international steelmaking association controlled by Indian businessman Lakshmi Mittal. Mittal also has controlling stakes in both Ispat and LNM Holdings and is chairman of both companies. He will become the chairman of Mittal Steel as well.
As part of deal LNM and Ispat will issue 525 million new shares, valued at 13.3 billion dollars. The new group will than merge with the US International Steel Group to form Mittal Steel. In total, ISG shareholders will receive 42 dollars per share with the proviso that half of the amount will be in cash the other in Mittal Steel shares.
The merger should be finalized by the end of the first quarter of 2005.
The companies involved have already signed a letter of agreement with the United Steelworkers of America and the Independent Steelworkers Union.
"These transactions dramatically change the landscape of the global steel industry," Mittal said in a press release.
10/25/2004 - 13:56 GMT - AFP