ThyssenKrupp of Germany yesterday trumped Arcelor, the world's second-largest steelmaker, by making an agreed €3.5bn (£2.4bn) offer to acquire Dofasco, Canada's biggest steel group, in a new wave of consolidation in the industry.
Luxembourg-based Arcelor, which made a hostile €3.2bn bid for Dofasco last week, indicated it could spark a bidding war with a better offer. Dofasco's shares jumped higher than the German bid.
Ekkehard Schulz, ThyssenKrupp chief executive, whose "white knight" bid was 10% higher than Arcelor's and a 40% premium to Dofasco's closing price on November 22, also pointed to the prospect of a bigger offer, saying the C$61.50 (£30.68) he had tabled was "a start". He said: "We are in the driving seat and know we were very welcome to the Dofasco board, which called us to see if we would enter a support agreement and unanimously approved our offer.
"If anyone wants to outbid us, they will have to explain why to their shareholders and that won't be easy ... A higher offer can't be excluded but we are very confident," said Mr Schulz.
The Thyssen counter-offer, made and approved at the weekend, gives it control of large iron-ore reserves near Dofasco's HQ at Hamilton, Ontario, which it plans to use in part to expand in eastern Europe. It also has access to big reserves in Brazil.