Billionare Laskshmi Mittal, head of steel giant ArcelorMittal, rumored to be looking at entering the multi-billion-dollar takeover battle for Rio Tinto (RTP) – apparently has decided against it for now, sources familiar with the matter said on Monday.
The sources told Reuters that Mr. Mittal, chairman and chief executive of ArcelorMittal who only sunday joined the board of directors of Goldman Sachs Group Inc., (GS) has not completely ruled out a future purchase. But, it would be extremely unlikely in the short term while BHP Billiton Ltd. (BHP) seeks competition approval for the all-share takeover, sources added.
The steel giant more likely is not looking at a takeover of Rio Tinto, according to analysts – but possibly “the crumbs on the table”. Rio’s Iron Ore Company of Canada which is tipped as one arm likely to be offloaded in any asset sale, would be a strong probability of what ArcelorMittal might look at.
Speculation on Mittal entering the multi-billion-dollar deal started last month. On buying a 14.9% cent stake in Macarthur Coal, the world’s largest producer of pulverized coal, Mr Mittal said “ensuring a reliable source of raw material supply is more important than ever”.
Mr Mittal, the main shareholder in the steel maker as well as its chairman and chief executive, is keen to secure larger supplies of iron ore.
Steel makers across the world strongly oppose a Rio Tinto/BHP combination, fearing the merged firm would have too much pricing power. Vale (RIO), Rio Tinto and BHP together account for 75% of global iron ore exports.
BHP Billiton last month submitted its first paperwork with the European Commission, the European Union’s antitrust regulator, to gain approval for its hostile takeover.