[center]<b><span style='font-size:21pt;line-height:100%'>Mittal forges new deal with Arcelor</span></b><!--emo&:ind--><img src='style_emoticons/<#EMO_DIR#>/india.gif' border='0' style='vertical-align:middle' alt='india.gif' /><!--endemo-->[/center]
LONDON (MarketWatch) -- Mittal Steel and Arcelor SA reportedly have agreed to merger terms following Mittal's moved to sweeten its bid to 40.37 euros ($50.51) a share, raising the cash portion of the officer to 26.81 billion euros ($33.54 billion), according to published reports Sunday.
A story in the online edition of the Wall Street Journal reports principals from the two companies have agreed to the new terms but Arcelor's board of directors has yet to approve it.
<b>Read the story at WSJ.com (Subscription).</b>
If approved, it would mark the end of five months of dogged pursuit by Mittal for Arcelor and Mittal's success in upstaging Russian rival Severstal.
Under Mittal's improved bid, the majority of Arcelor's board would be made up of independent directors. Arcelor executives would have a greater presence on the management board for a set period of time, according to the Journal report, citing people familiar with the deal.
Spokespersons for Arcelor and Mittal could not be reached for comment on the reports.
http://www.marketwatch.com/News/Story/Imag...f7cf0&Track=201
<b>Lakshmi Mittal</b>
Up until two weeks ago, when discussions between Mittal <b>MT : 32.17, +0.72, +2.3%)</b>, <b>NL:36194:</b>, <b>news</b>, <b>chart</b>, <b>profile</b>) and Arcelor (<b>FR:005786:</b> <b>news</b>, <b>chart</b>, <b>profile</b>) started in earnest, the Luxembourg-based steelmaker had been firmly opposed to a deal, arguing that the two groups had divergent strategies.
In its efforts to fend off Mittal, Arcelor in May agreed a $16 billion tie-up with Russian producer Severstal.
Shortly after the Mittal/Arcelor talks started, Severstal, which is owned by Russian billionaire Alexei Mordashov, decided to improve the terms of its offer to address some of the shareholders' concerns that could have blocked a deal.
But that wasn't enough as investors pushed for Arcelor to merge with its bigger rival with more international operations.
<b>History</b>
Rotterdam-based Mittal first approached Arcelor in January with an unsolicited $22.7 billion bid.
Arcelor Chief Executive Guy Dolle tried to fend off the bid with a $6 billion buyback and the ringfencing of recently acquired Canadian producer Dofasco into an independent Dutch foundation with control over the unit.
In mid-May, Mittal raised its offer by 34% to $32.9 billion but was again rebuffed.
A few days later, in the ultimate snub, Arcelor agreed a hook-up with Russia's second-largest producer Severstal. <b>See Battle Timeline.</b>
In the following weeks, Mittal's Chief Executive Lakshmi Mittal waged a war of words on the deal, taking out numerous ads in financial newspapers urging Arcelor shareholders to reject the Severstal deal and arguing that it would give control of the combined company to Mordashov.
<i>Aude Lagorce is a reporter for MarketWatch in London.</i>
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