Arcelor rejects proposed Severstal merger

The shareholders meeting of Arcelor, which met on 30 June 2006 under the Chairmanship of Mr Joseph Kinsch, has resolved to reject the proposed Severstal merger. Arcelor’s board of directors has announced that approximately 58% of the outstanding share capital of Arcelor voted against the proposed Severstal merger. Based on this result, Mr Kinsch stated that the strategic alliance agreement with Mr Mordashov will be terminated in accordance with the terms of such agreement. The Arcelor release also said that a second resolution, relating to the convocation of a further shareholders’ meeting to approve the proposed Severstal merger, had been added to the agenda of the shareholders meeting at the request of persons who represented that they were shareholders and that they collectively held more than 30% of Arcelor’s share capital. As signatories of the letter did not represent 30% of Arcelor’s outstanding share capital, as claimed, but less than 20% of the share capital, which is the minimum threshold provided by the Luxembourg law, the proposed resolution was withdrawn from the agenda.
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