Mittal Arcelor may eye Japan steel firm

Tokyo, May 22 | Updated: May 23 2007, 05:30am hrs
A Japanese steelmaker could become Mittal Arcelors next takeover target as the worlds No1 steel maker eyes technology for high-end automotive sheet, the head of Kobe Steel Ltd said on Tuesday. Kobe Steel president Yasuo Inubushi said the European steel giant, formed after Mittal Steels unsolicited bid for Arcelor last year, is entering a new stage in its expansion drive.

The group now appears to be pushing into the upper-end market for car sheet after a stage of seeking growth in size through acquisitions of small firms, he told a lunch meeting. It would not be unusual for them to consider buying Japanese steel makers, who have an edge in such products and supply picky Japanese carmakers.

Mittals hostile bid for Arcelor last year has rattled current world No 2 Nippon Steel Corp, the biggest beneficiary of strong worldwide sales of Japanese cars made by Toyota Motor Corp and others, prompting it to raise defences. Nippon Steel quickly ditched its strategy focusing on high-end products, and has since been seeking growth in size by consolidating domestic and Brazilian firms, while boosting ties with Asian peers such as South Koreas POSCO Ltd and Chinas Baoshan Iron and Steel Co.

Its Brazilian affiliate Usiminas recently announced a $4.3 billion production expansion plan in Brazil, with full technological support from parent Nippon Steel. We were lucky that Mittal turned to Arcelor last year, not to us, Nippon Steel president Akio Mimura recently said on a TV programme about its efforts to avoid a hostile bid. Kobes Inubushi said his company had no plans to expand through mergers and acquisitions.

Reuters