THE $23 billion (£13 billion) bid battle for control of Arcelor, France’s biggest steelmaker, turned dirty yesterday as the company’s management and the French Government questioned the safety record of the bidder, Mittal Steel, and suggested that the London-based company was too foreign.

Thierry Breton, France’s Finance Minister, launched a highly personal attack on Lakshmi Mittal, chairman of Mittal Steel, saying that his hostile bid was unacceptable in a modern economy. The chairman of Arcelor, Guy Dollé, joined the attack on Mr Mittal, according to reports in Le Figaro, describing the Indian steel tycoon as “an able seducer who does not always tell the truth”.

Speaking to French radio, the Minister said: “I would suggest to [Mr Mittal] to reflect carefully on what took place in the United States . . . when a Chinese group, CNOOC, undertook a hostile bid for the the American oil company, Unocal, before giving up.”

CNOOC’s failed bid for Unocal last year aroused protest in the US Congress over fears that China would acquire strategic oil assets.

Yesterday, in pointed remarks directed at the nationalist reaction of France’s Government, the European Commission condemned a retreat behind protectionist barriers. Gregor Kreuzhuber, a Commission spokesman, said: “We don’t want to go back to the 1970s when people believed that European industry could be made more competitive through protectionism.”

The Mittal camp did not respond to the wave of Gallic vitriol yesterday, but Mr Mittal stuck to his guns at a press conference in Paris, saying he thought his offer for Arcelor was a good one and that he had no plans to revise it.

The billionaire repeated his reassurances on jobs and insisted a merger could be achieved without closing plants, particularly those in France, which are Arcelor’s prize assets and employ 30,000 people. “We are not at war here, we are creating value for the shareholders,” Mr Mittal said.

People close to his company said Mr Mittal still hoped the bid could become friendly. A spokesman for it said: “We are ready to talk about all the issues: the strategy, the board composition, the management.” There have been suggestions M Dollé could be offered a top job in a merged group.

Shares in both companies rose as analysts praised the logic of a merger. One adviser said: “The market loves this deal. How often do you launch an unsolicited bid and the stock price goes up?” Analysts expect Mr Mittal will eventually raise his bid slightly, but say he has plenty of time to do so.

M Dollé insisted that Arcelor would “not share its future with Mittal because the two companies are completely different”. In a speech to appeal to unions and politicians, he questioned Mittal’s safety record and called its empire “an opportunistic construction”.

Arcelor shares rose 3.5 per cent to €29.56. Mittal shares were up 5.7 per cent to $36.22 in New York.

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