Date:30/03/2006 URL: http://www.thehindubusinessline.com/2006/03/30/stories/2006033004240100.htm

Back Mittal bid: Luxembourg may wait for new M&A law

Our Bureau

Krecke discusses Arcelor deal with Chidambaram, Kamal Nath

MR JEANNOT KRECKE, Minister for Economy and Trade, Luxembourg, calling on the Finance Minister, Mr P. Chidambaram, in the Capital on Wednesday. — Ramesh Sharma

New Delhi , March 29

The Minister for Economy and Foreign Trade of Luxembourg, Mr Jeannot Krecke, who is on an official visit to India, told reporters here today that "Luxembourg would look at Mittal Steel's bid for the takeover of the second largest international steel company, Arcelor, from the shareholder's point of view. We have appointed J P Morgan and have sought their financial advice after which we will decide."

Mr Krecke also indicated that the regulatory authorities in Luxembourg were likely to wait till the proposed law for setting up a legal framework for corporate takeover was in place, before they decide on Mittal Steel's bid. This legislation would put a bar on bidders making a second bid within a one-year period. The Luxembourg Government owns 5.6 per cent stake in Arcelor.

The Minister admitted that the issue of Arcelor came up during his meetings with the Finance Minister, Mr P. Chidambaran, and the Minister for Commerce and Industry, Mr Kamal Nath, today. The issue of Double Taxation Avoidance Treaty between the two countries was also discussed.

But he also said that since several regulators were studying the bid with the regulatory authorities in Luxembourg coordinating the process, they might decide to wait till the new legal framework was in place, because currently there was no law on takeovers in Luxembourg.

On the proposed merger and acquisition law that is being debated in the Luxembourg Parliament, Mr Krecke said that "It was an European Union directive of 2004 to have the law in place within two years, that ends in may this year. This is much before Mr Mittal made his bid. So these two are not related."

Addressing a joint press conference with the visiting Minister, Mr Nath said that "the issue is not of L.N. Mittal, but there is an important question of national treatment."

On the proposed Double Taxation Avoidance Agreement with Luxembourg, the Ministers said the negotiations were on and both the countries were keen on concluding such a pact.