Nippon Steel declined to comment on 13 February about reports that its technology tie up with Arcelor could help it fight off a hostile takeover bid by Mittal Steel. Under a Change of Control clause in the tie up agreement, Nippon Steel can stop Arcelor from using technologies it has provided to the firm if it is taken over, the Yomiuri and Nihon Keizai newspapers said over the weekend. “We cannot comment on anything, including whether there is such a clause,” a Nippon Steel spokesman said. It is unclear whether Nippon Steel, which also partners Mittal on steel sheet production through a joint venture, would use the clause, the Nihon Keizai newspaper said. Doing so could cause supply problems for Japanese automakers, the Yomiuri said. It is learnt that Nippon Steel & Arcelor tie up covers technologies for high grade steel sheets used in automobiles, an area where Japanese steel makers have an edge over rivals because of tough requirements by Japanese automaker, their key clients. The so called Change of Control clause that is understood to be written into the partnership contract would give Nippon Steel the right to withdraw the patents for any technology that it shared with Arcelor, if that company’s ownership structure shifts in anyway.
