WASHINGTON, May 12: The US government on Friday cleared Mittal Steel’s controversial takeover of European rival Arcelor provided it sells off key assets such as Canadian steelmaker Dofasco.

If the takeover goes ahead, the Department of Justice said the world’s largest steel group would be obliged to sell Arcelor unit Dofasco to German giant ThyssenKrupp.

Mittal Steel has already committed to selling Dofasco to ThyssenKrupp should it win control of Arcelor, which is bitterly resisting its hostile takeover.

Among its defences erected against Mittal Steel, Arcelor is considering transferring Dofasco to a foundation as a way of blocking the unit’s sale to the German company.

But the DoJ said that it had reached an agreement with Mittal making it obligatory for the steel group to sell Dofasco or other unspecified assets to resolve anti-trust concerns in the United States.

“The agreement requires Mittal to divest Dofasco Inc., currently owned by Arcelor, to ThyssenKrupp AG in the event the department determines the combination of Mittal and Arcelor is likely to result in a substantial lessening of competition,” it said in a statement.

“If Mittal acquires Arcelor but is unable to divest Dofasco, the agreement requires Mittal to divest certain alternative assets to a buyer acceptable to the department.

“The department has determined that the divestiture of either Dofasco or the alternative assets would address the potential competitive problem identified by the department.”

Mittal, the biggest steelmaker worldwide in terms of volume, has struggled since the beginning of the year with a bid for Arcelor that is currently worth around 22 billion euros.

The Netherlands-based group run by Indian-born tycoon Lakshmi Mittal also has to get approval for its takeover from the European Union’s anti-trust watchdog.

Mittal suffered a setback on Wednesday when the EU’s executive commission put back its deadline for making a decision by two weeks to June 7.

The takeover bid has provoked a storm of objections from the governments of France, Luxembourg and Spain, where Arcelor has major plants.

Arcelor, the world’s second-biggest steel producer behind Mittal, was formed in 2002 by a merger of French steel group Usinor with Spanish company Aceralia and Luxembourg’s Arbed.

In the United States, Mittal directly operates 12 plants employing more than 10,000 workers. Arcelor is heavily focused on Europe, and before its February purchase of Dofasco had no manufacturing presence in North America.

In documents submitted to European governments, Mittal has said the two companies’ operations are “complementary” and therefore almost no job cuts are expected.

The DoJ said that its agreement with Mittal enabled it “to complete its investigation and, if necessary, to implement an adequate remedy while Mittal’s tender offer proceeds”.—AFP