Mittal Steel on Monday denied rumours that, following Arcelor's agreement to merge with the Indian group, it would sell its stake in Mittal Steel South Africa.

Mittal Steel own 52 percent of Mittal Steel SA.

A daily newspaper reported on Monday that Mittal would consider dumping its South African operations should Arcelor and Mittal merge. But according to a Mittal Steel spokesperson, Paul Weigh, "We firmly deny this rumour and it couldn't be further from the truth".

He added that Mittal's SA operations were a flagship subsidiary of the overall business.

The rumours followed an announcement on Sunday by Arcelor that, after a five-month standoff, the board had recommended Mittal's improved offer, and thereby also the formation of a Mittal-Arcelor combination.

Russian group Severstal had already signed a merger agreement with Arcelor, and the latter will now have to pay €130-million following the breach of contract.

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