(Adds further details)
LUXEMBOURG (AFX) - Arcelor SA has accepted an increased takeover offer from Mittal Steel Co NV and the two groups will merge to form Arcelor-Mittal, Arcelor chairman Joseph Kinsch said.
He said Mittal has increased its bid by 10 pct from the 37.74 eur per share offer made in May.
Mittal will hold a 43 pct stake in the merged company and will not have the right to exceed a holding of 45 pct, a source close to the matter said.
Kinsch said the Arcelor board, which held a nine-hour meeting here Sunday, had determined that Mittal's offer was superior to one put forward by Russian steel producer Severstal.
'We came to the conclusion that Mittal's offer was a better offer than the Severstal proposal,' he said.
'The Arcelor model will apply to the new group,' Kinsch added.
He said Arcelor would maintain industrial relations with Severstal. newsdesk@afxnews.com afp/ak COPYRIGHT Copyright AFX News Limited 2005. All rights reserved. The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News. AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited