No white knights for Arcelor — France cools off rhetoric
Paris, France: Arcelor admitted yesterday that there was no industrial "white knight" and it will have to fight off the £13bn bid from Mittal Steel on its own. Guy Dollé, Arcelor chief executive, said: "An industrial white knight doesn't exist and I don't believe in a financial one either."

The hostile take over bid from Mittal Steel seeks to create a global giant by merging the world's first- and second-largest steel makers, with a market share of about 10 per cent. There had been speculation about a possible white-knight deal between Arcelor and the No 3 player, Nippon Steel of Japan, after Dollé held talks with Nippon in Paris. But Dolle has now described such an alliance as "not credible".

Dollé's admission that Arcelor now stands alone came as he and Lakshmi Mittal, the Indian-born tycoon whose family controls Mittal Steel, attended an International Iron and Steel Institute conference in Paris yesterday. The meeting brought together steel industry players from around the world and although it presented a perfect opportunity for the two company heads to meet, they decided against doing so.

However, Dollé reiterated the opposition of Arcelor's board to the proposal. He said: "We are completely determined in our opposition to Mittal Steel's offer which does not meet the interest of shareholders, its business partners or the rest of the group's stakeholders."

Meanwhile, with the Indian commerce minister Kamal Nath, in concert with Peter Mandelson, the EU trade commissioner, effectively putting France on notice over the deal, the French government has cooled off its rhetoric and, for now, appears to have left Arcelor to fend for itself. Originally, the French finance minister, Thierry Breton, condemned the bid but on Thursday he said it was up to Arcelor's shareholders to decide the company's future.

Mittal's offer envisages annual cost savings of up to £570mn (US$1bn) for the combined group. Shareholders in the Luxembourg-based Arcelor, however, have expressed their concern about ending up with an investment in a company dominated by the Mittal family, who will hold 64 per cent of the company's voting rights in the combined entity.

Luxembourg's government owns 6 per cent of Arcelor and the group's remaining shareholders consist of institutional investors.
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Chip sales in 2005 up at US$227.5bn
Driven by demand for consumer electronics and PCs, global chip sales rose 6.8 per cent to reach US$227.5bn in 2005, according to a report from the Semiconductor Industry Association, which suggests that earlier projections had underestimated the potential for growth.

Initially, SIA and other market research firms had forecasted flat sales or a decrease in revenue for last year because of a buildup of unsold chips in late 2004.

"Consumer electronics products such as cellular phones, digital cameras, digital televisions, and MP3 players were the principal drivers of increased demand for microchips," George Scalise, president of the Semiconductor Industry Association, said Thursday. Computer sales grew 17 per cent in the fourth quarter of 2005.

In the final analysis, 2005 turned out to be a pretty good year for semiconductor companies. Asia Pacific's appetite for chips continued to grow. Sales grew 20 per cent in December from a year ago. Overall, the region had 46.6 per cent of the global market. China consumed the most chips.

Japan, on the other hand, experienced a decline, with sales to the country in December dropping 6.2 per cent compared with the same period a year ago. For the last quarter of 2005, sales decreased by 2.2 per cent.

Chip vendors benefited from the cell phone market growth in 2005. Handset shipments grew 14 per cent to reach 821.5 million units last year, according to iSuppli. The market research firm is expecting a mere 4.6 percent increase in 2006, however.

SIA expects 2006 revenue to grow by 7.9 per cent to reach US$245bn.
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UK 's "now culture" sees record numbers go bust
London, UK: According to UK Government figures the number of people going bankrupt has hit a record level as consumers struggle to cope with spiralling debt. The figures reveal that there has also been a sharp rise in repossessions as people failed to meet their mortgage repayments.

According to the figures, almost 20,500 people became insolvent in the final quarter of last year, which is a 57 per cent increase on the corresponding period in 2004.

Debt experts blame the problem on credit card companies as well as an instant gratification culture among the young. According to the experts, although there were many reasons for getting into debt, including family or employment crises, the main problem was the "now culture".

They say that people of all ages are expecting things now and no longer wanting to save to buy them, which is generating higher volumes of insolvencies. According to the experts, while ten years ago debt problems would have had to do with council tax and rent arrears, it is now mostly credit cards, personal loans and hire purchase.

Interestingly, figures from the Student Loans Company showed recently that many students were declaring themselves bankrupt to escape repayments. Although a loophole has been closed to stop students from declaring themselves bankrupt on leaving university and ignoring their debts, there is nothing to stop a student paying off his or her loan with a credit card then walking away debt free after filing for bankruptcy.

Age Concern issued a recent warning that many elderly people were becoming debt-ridden as they struggled with heating bills and maintenance on their houses. Home repossessions rose to 10,250 last year, up 70 per cent on 2004.

The Enterprise Act of April 2004 dramatically lessened the impact of bankruptcy. People are now discharged an average of eight months after being declared bankrupt, instead of three years later. The Consumer Credit Counselling Service said that had affected the number of people choosing to file. A spokesman also said that attitudes in society had shifted and that bankruptcy no longer carried such a great stigma.
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Harrods shuts pension scheme
London, UK: Famous London department store Harrods is closing its final salary pension plan to new and existing employees at the start of April. Harrods has said the decision was "not taken easily", and that a new money purchase scheme will be introduced.
The Transport and General Workers Union said staff were "shocked." The union said there were currently 1,500 members of the pension scheme who will be directly affected by the change.

The department store, based in Knightsbridge, said that longer life expectancy, lower interest rates, higher taxes and low investment returns recently had all contributed to increased funding deficits and the cost of providing future defined benefit pensions.

It would not comment on the details of the new scheme, but the union said staff had been sent letters saying the company would contribute 4% to the scheme if staff paid in 2% or more of their salary, rising to 8% if they paid in 5% of their wages.

The T&G, which represents warehouse and distribution staff across the store's London operations, says the higher rate is only around half the maximum 15% Harrods pays into the final salary scheme now.

The new Defined Contribution Pension Plan will allow staff to make contributions, which, together with contributions from Harrods, will be invested in an individual account in their name with a pension provider chosen by the firm.
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