BRUSSELS, Nov 6 (Reuters) Steel magnate Lakshmi Mittal took the reins at Arcelor Mittal today, replacing an Arcelor man at the top just four months after a bitter 33 billion dollar merger to form the combined group.
The world's largest steelmaker, still in the process of being formed, also reported third-quarter figures showing pro-forma core profit slightly ahead of expectations and reiterated its guidance for the full year.
Mittal Steel, which took over Luxembourg's Arcelor after a ferocious stock market battle, had initially pledged to keep an Arcelor man as chief executive of the new steel behemoth in a bid to calm political opposition to the deal.
Arcelor Mittal said in a statement today that the board of directors had unanimously appointed Lakshmi Mittal as the new chief to replace Roland Junck of Arcelor, who remains a member of the group's management board.
''We are making these changes to clarify the leadership of the company. It had become clear over the past months that the interests of the company were not best served by the previous structure,'' said Joseph Kinsch, chairman of the board, who had been a leading Arcelor figure resisting Mittal's advances.
The move, which Junck said he proposed, will be put to shareholders for a vote in which the Mittal family, which owns over 40 per cent of Arcelor Mittal, will not take part.
Mittal said the integration of the two groups was progressing well and put the total price of the takeover of Arcelor at 33.4 billion dollars.
Arcelor Mittal also said its board is committed to selling the company's Canadian unit Dofasco.
The decision on the unit's future will taken this month by a Dutch foundation set up by Arcelor during the takeover battle.
The takeover battle for Arcelor ended in late June and by the end of August Mittal Steel held 93.7 per cent of Arcelor's shares. The merger should be completed in April or May next year, Kinsch said.
Mittal shares closed down 0.3 per cent at 32.90 euros while the Dow Jones European base resources index rose 2.2 per cent.
MOVE EXPECTED A London-based analyst, who declined to be named, said it was no great surprise.
''Pretty much everyone knew who the leader of the group was.
The chief has not really changed. But why let investors, especially French investors, wait until now? It was always going to be the case,'' he said.
Colette Neuville, head of the Adam minority shareholder group, said it was a shame Mittal had not said from the start that he would head the group.
''But it doesn't pose a problem as long as there are effective checks and balances in the company and that for example board members play their role fully,'' she said.
Luxembourg Prime Minister Jean-Claude Juncker told local radio he took note of Junck's resignation with ''extreme regret''. The company will remain headquartered in Luxembourg.
Lakshmi Mittal had been non-executive president of the group and was due to succeed Kinsch as chairman when the latter retired. Officials said it would be up to the board to decide whether this would still happen.
FINANCIAL GUIDANCE MAINTAINED Arcelor Mittal said EBITDA (earnings before interest, tax, depreciation and amortisation) amounted to 4.35 billion dollars, compared with the average forecast of 4.29 billion dollars from a poll of seven analysts by Reuters.
''The anticipated low seasonal volume was offset by a strong rise in steel prices... Looking ahead, we are on track to deliver guidance for the full year,'' Chief Financial Officer Aditya Mittal said in a statement.
Third-quarter sales amounted to 22.1 billion dollars compared with the average forecast from the poll of 23.07 billion dollars.
Arcelor Mittal said it expected steel prices to stabilise as global output decelerates, especially in China.
''The rate of production increase that we expect in 2007...should slow down a little bit due to low profitability of the Chinese activities and the investment of Chinese producers more in value-added products,'' Junck told a conference call.
For a chronology on the Arcelor Mittal merger double click on.
REUTERS AKJ RN2330
The world's largest steelmaker, still in the process of being formed, also reported third-quarter figures showing pro-forma core profit slightly ahead of expectations and reiterated its guidance for the full year.
Mittal Steel, which took over Luxembourg's Arcelor after a ferocious stock market battle, had initially pledged to keep an Arcelor man as chief executive of the new steel behemoth in a bid to calm political opposition to the deal.
Arcelor Mittal said in a statement today that the board of directors had unanimously appointed Lakshmi Mittal as the new chief to replace Roland Junck of Arcelor, who remains a member of the group's management board.
''We are making these changes to clarify the leadership of the company. It had become clear over the past months that the interests of the company were not best served by the previous structure,'' said Joseph Kinsch, chairman of the board, who had been a leading Arcelor figure resisting Mittal's advances.
The move, which Junck said he proposed, will be put to shareholders for a vote in which the Mittal family, which owns over 40 per cent of Arcelor Mittal, will not take part.
Mittal said the integration of the two groups was progressing well and put the total price of the takeover of Arcelor at 33.4 billion dollars.
Arcelor Mittal also said its board is committed to selling the company's Canadian unit Dofasco.
The decision on the unit's future will taken this month by a Dutch foundation set up by Arcelor during the takeover battle.
The takeover battle for Arcelor ended in late June and by the end of August Mittal Steel held 93.7 per cent of Arcelor's shares. The merger should be completed in April or May next year, Kinsch said.
Mittal shares closed down 0.3 per cent at 32.90 euros while the Dow Jones European base resources index rose 2.2 per cent.
MOVE EXPECTED A London-based analyst, who declined to be named, said it was no great surprise.
''Pretty much everyone knew who the leader of the group was.
The chief has not really changed. But why let investors, especially French investors, wait until now? It was always going to be the case,'' he said.
Colette Neuville, head of the Adam minority shareholder group, said it was a shame Mittal had not said from the start that he would head the group.
''But it doesn't pose a problem as long as there are effective checks and balances in the company and that for example board members play their role fully,'' she said.
Luxembourg Prime Minister Jean-Claude Juncker told local radio he took note of Junck's resignation with ''extreme regret''. The company will remain headquartered in Luxembourg.
Lakshmi Mittal had been non-executive president of the group and was due to succeed Kinsch as chairman when the latter retired. Officials said it would be up to the board to decide whether this would still happen.
FINANCIAL GUIDANCE MAINTAINED Arcelor Mittal said EBITDA (earnings before interest, tax, depreciation and amortisation) amounted to 4.35 billion dollars, compared with the average forecast of 4.29 billion dollars from a poll of seven analysts by Reuters.
''The anticipated low seasonal volume was offset by a strong rise in steel prices... Looking ahead, we are on track to deliver guidance for the full year,'' Chief Financial Officer Aditya Mittal said in a statement.
Third-quarter sales amounted to 22.1 billion dollars compared with the average forecast from the poll of 23.07 billion dollars.
Arcelor Mittal said it expected steel prices to stabilise as global output decelerates, especially in China.
''The rate of production increase that we expect in 2007...should slow down a little bit due to low profitability of the Chinese activities and the investment of Chinese producers more in value-added products,'' Junck told a conference call.
For a chronology on the Arcelor Mittal merger double click on.
REUTERS AKJ RN2330
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