Arcelor Mittal will be able to keep control over profitable Canadian steelmaker Dofasco after a Dutch court on Jan. 23 sided with Mittal in its dispute with German ThyssenKrupp. The court ruled that Mittal, which last June acquired Arcelor and is now known as Arcelor Mittal, cannot be obliged to sell Dofasco to ThyssenKrupp. The German steelmaker had taken legal action to acquire Dofasco.
Dofasco is one of the most profitable north American steelmakers, providing steel to the automobile industry and with Japanese Honda as one of their biggest clients. Prior to its merger with Mittal, Arcelor, which had bought Dofasco in January 2006, transferred its shares in the Canadian company to an independent foundation in The Netherlands, Strategic Steel Stichting.
Mittal Steel later struck a deal with ThyssenKrupp to sell the German group Dofasco if Mittal were successful in acquiring Arcelor. But the Dutch court ruled that under the agreement Mittal could only be required to make "reasonable efforts" to try to make Arcelor sell the shares. The judge said Mittal had fulfilled these requirements.
ThyssenKrupp wanted to obtain Dofaso from the new Arcelor Mittal group and thereby move up from being the 10th biggest steel producer in the world to number six.
The court here said Mittal possessed only "indirect authority" in the matter and that the Dutch foundation, which controls 89% of Dofasco, had recently expressed a desire to decide for itself if it wanted to sell Dofasco. It also determined that that at the time it purchased Dofasco Arcelor was an "independent entity."
ThyssenKrupp said later in a statement "the prospects for... acquiring Dofasco are now greatly reduced." It added that it would "rapidly" pursue efforts to build a factory in the U.S. in order to bolster its position on the North American market.
Copyright Agence France-Presse, 2007
