Arcelor files law suit against Mittal

Luxembourg/Brussels: Arcelor SA said on Thursday it had filed a lawsuit in the US against Mittal Steel Co for copying a type of steel for the auto industry.

Mittal called the suit 'without merit' and said it was confident it had not infringed Arcelor's patent.

"We have decided on Wednesday afternoon to take Mittal to court over patent infringement," Arcelor spokesman Jean Lasar said on Thursday, confirming a report in the Luxembourg press.

A spokesman for Mittal declined to comment, saying the company had not yet seen Arcelor's statement. Lasar said the action concerned so-called Usibor steel technology, used in the automobile industry.

"We are defending our intellectual property rights," Lasar said, adding that his company's legal challenge was unrelated to Mittal's takeover bid. "We would have done the same if it had been another competitor," Lasar added. Arcelor and Mittal report first-quarter results on Friday.

Arcelor SA Chief Executive Guy Dolle on Wednesday described as insufficient Mittal Steel Co.'s offer to revise its takeover offer, and EU regulators delayed their deadline to clear the bid.

''A marginal improvement on an insufficient offer still makes an insufficient offer,'' Dolle told Dow Jones Newswires on the sidelines of the inauguration of a gas-fired power station in Dunkirk, northern France.

Mittal said on Tuesday it would be willing to revise its €19 billion (US$23 billion) takeover bid for Arcelor SA and significantly change its corporate governance if its Luxembourg-based rival recommends the offer to its board.

Mittal did not specify a new value, and it was not clear whether a revision of the bid would mean a higher offer or a larger cash component. CEO Lakshmi Mittal said the additional value attached to a recommended bid would be ''marginal.''

Arcelor has rebuffed the surprise cash-and-stock offer that would combine the world's top steel makers into a titan with nearly a 10 percent share of global steel production and a market capitalization close to $40 billion.

The company has said it will launch its formal offer for Arcelor after it has received all regulatory clearances. EU regulators on Wednesday shifted their deadline until June 7.

The European Commission said it would take an extra ten working days to look at the deal to study commitments Mittal has made to resolve antitrust problems.

The original deadline was May 19.

Despite several European governments' misgivings about the bid, market watchers say they expect the deal to clear the EU regulatory hurdle since the two companies have few areas of overlap.

Mittal is the biggest US supplier of high-grade, high-margin auto steel. Arcelor occupies the same position in Europe.