The world's biggest steelmaker has made bid of $23 billion for its biggest rival today in a bold move to consolidate the fragmented industry.
Mittal Steel offered cash and shares for European market leader Arcelor in what would be the biggest deal the industry has seen.
The shake-up includes a side deal to sell on Canadian steelmaker Dofasco to Germany's ThyssenKrupp.
The Mittal and Arcelor tie-up would create a steel producing giant that would be more than three times as big as its nearest rival, Nippon Steel.
Mittal, whose billionaire founder Lakshmi Mittal would get 51 per cent in the combined business, said it had also struck a deal to sell Dofasco to ThyssenKrupp for about $4.7 billion if Arcelor completes its agreed takeover of Dofasco.
Analysts said Mittal's plan would go a long way to addressing the fragmented steel industry's perennial problem of struggling to rein in capacity during an economic downturn, and steel shares across the world rallied on hopes of more deals.