updated 1/30/2006 8:05:04 PM ET 2006-01-31T01:05:04

Steel magnate Lakshmi Mittal went on a charm offensive Monday to calm misgivings over his $22.5 billion unsolicited offer for Arcelor SA — as the smaller steelmaker went on the attack.

The Mittal Steel Co. chairman and CEO pledged to create a European champion, protect European jobs and respect European labor conditions. Arcelor warned against its predator’s “irregular” profitability, pledging to consider “all options” to foil the hostile bid.

“Mittal is committed to the social policies and commitments that Arcelor has implemented,” Lakshmi Mittal said. “Regarding employment, this merger is not about job reductions.”

The Indian-born steel boss — ranked the third richest man on the planet by Forbes magazine — was speaking at a Paris news conference after meeting Thierry Breton, the French finance minister. Breton said he had still to be convinced that a tie-up between the world’s top two steel companies would be risk-free for France, where Arcelor employs 30,000 workers.

Mittal Steel had “no industrial plan on the table” to explain how the takeover would work, the minister said. “Without any information at this stage, we can only reiterate our deep concern.”

Lakshmi Mittal sidestepped questions about whether the deal could proceed against government opposition. “I do not see the reason why the government will not accept this,” he said. The 55-year-old steel boss is scheduled to meet Tuesday with Prime Minister Jean-Claude Juncker of Luxembourg, whose government is the largest shareholder in Arcelor with a 5.6 percent stake.

Juncker is also set to discuss the takeover bid at a meeting with French President Jacques Chirac on Wednesday, when Mittal will meet Belgian authorities and the EU’s competition commissioner to discuss his plans for Arcelor — created in 2002 from a merger of French, Luxembourg, Belgian and Spanish steel interests.

Mittal said the combined entity would be headquartered in Luxembourg, like Arcelor, with “ample room for Arcelor’s management” in the new company. “For me this is really a merger of equals and we intend to treat it as such,” he said.

He also signaled flexibility on his own voting rights — which he has already pledged to reduce from 10 to 2 votes for each of the Mittal family-owned special shares. Asked if he would consider a further reduction, he replied: “If there are major opportunities going forward and if it is the desire of a lot of future shareholders, we will definitely consider it.”

The takeover bid, announced Friday, would create a new behemoth with a near-10 percent share of global steel production and a market capitalization close to $40 billion. The new company would have almost 350,000 employees at 61 plants in 27 countries — but few areas of overlap that could cause antitrust problems. Mittal Steel is the biggest U.S. supplier of high-grade, high-margin auto steel; Arcelor occupies the same position in Europe.

“It’s the best fit between any two companies in the industry,” Mittal said.

In his own tit-for-tat Paris news conference Monday, however, Arcelor CEO Guy Dolle launched a counterattack against Mittal Steel. Highlighting Arcelor’s superior mix of high-grade production and his Rotterdam-based rival’s relative dependence on spot-traded commodity steel, he talked up the unpaid integration costs of Mittal’s recent expansion drive, without giving figures.

The Arcelor boss did not try to hide the personal pique behind his business argument, angrily rejecting Mittal’s suggestions that he had sought to discuss a friendly offer when the two met Jan. 13 at Mittal’s London home.

“When 300,000 employees and a market capitalization of 40 billion euros are concerned, I think it deserves more than a four-minute conversation after the aperitif,” Dolle said, adding: “That’s the definition of a friendly offer, according to Mr. Mittal.”

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