Fitch keeps Mittal Steel on negative watch

Fitch Ratings said Mittal Steel Co. NV's issuer default and senior unsecured ratings of BBB and short-term F2 rating remain on rating watch negative following the company's announcement that roughly 92% of Arcelor shareholders have accepted its offer for the company.

While Fitch regards the transaction as effectively completed, the agency will not resolve the negative watch until it has received detailed information from company management on a number of issues.

Fitch said the financial profile of a combined Mittal Steel/Arcelor would be weaker than that of Mittal Steel on a stand-alone basis. The agency, however, acknowledged the complementary business mix between Mittal Steel and Arcelor, the operational benefits that would be provided by the enhanced scale of the combined entity and the potential $1.6 billion synergies to be gained during the next three years.

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