The Arcelor decision torpedoes a proposed merger involving Russia's Severstal [RTS: CHMF] that would have created the world's largest steelmaker. But shareholders were unhappy with the proposed terms, which would have seen the Russian company pay 13 million euros and take a 25% stake in the merged company.
State Duma Speaker Boris Gryzlov said, "I regard the events around this deal as an example of serious obstacles Russian business is facing when it enters foreign markets."
He said the serious efforts that had been made to prevent the Severstal-Arcelor tie-up showed that Russian business was competitive, and that "Russian companies have very good prospects on world markets."
Luxembourg-based Arcelor's board approved Sunday night a deal with its key rival, Mittal Steel, which had proposed conditions that would see Arcelor's share price rise from 37.74 to 40.4 euros. Arcelor and Mittal Steel will hold 50.6% and 49.4%, respectively, in the new company.
Russia's Industry and Energy Minister Viktor Khristenko said he was dissatisfied with the Arcelor decision.
"This is a bad sign," he said.
