ArcelorMittal, the world's largest steelmaker, received a final go-ahead from investors on Monday for the merger between ex-rivals Mittal Steel and Arcelor amid protests from minority shareholders.
Most Arcelor shareholders in June 2006 accepted a 26 billion euro ($37 billion) friendly offer from Mittal after an acrimonious take-over battle, but investors representing 6 percent of the stock decided not to tender their shares.
ArcelorMittal, whose shareholders approved the finalisation of the merger in a meeting on Monday morning, is now offering eight of its shares for seven in Arcelor to the minority holders. It had offered 11 for seven in last year's takeover.
An Arcelor shareholders' meeting also cleared the deal on Monday afternoon despite heated protests from some investors, who deem the new merger exchange ratio too low.
"It was a concept, now it's a reality," Chief Executive Officer Lakshmi Mittal told reporters after the meetings. At a separate news conference on Monday, minority shareholders said they would launch legal proceedings in Luxembourg against ArcelorMittal over the merger terms in the coming days. The shareholders - Deminor, Trafalgar and SRM Global - have said they represent 9 million shares.
"ArcelorMittal has taken 1 billion euros of value from Arcelor minorities and its actions are a flagrant abuse of European corporate governance standards," they said in a joint statement.
They also said that they intended to launch legal procedures against any party, in any possible jurisdiction in order to recover losses resulting from the lower ratio. A source close to the angry shareholders said legal action could possibly target ArcelorMittal board members.
ArcelorMittal Chairman Joseph Kinsch told the Arcelor shareholder meeting that the disgruntled investors' allegations were groundless. "There is no legal basis to say that Arcelor shareholders have been abused," he told investors.
ArcelorMittal has repeatedly dismissed criticism that it is paying too little and said it was confident the exchange ratio reflected the intrinsic value of both companies.
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