December 2004

Mittal Steel Merger Creates World's Largest Steel Company

Rotterdam, The Netherlands, and Richfield, OH— Ispat International N.V. announced that it has agreed to acquire LNM Holdings N.V. Following completion of the transaction, the company will be renamed Mittal Steel Company N.V. Simultaneously, Ispat International and International Steel Group Inc. announced that their boards of directors have unanimously approved a definitive agreement under which Ispat International and ISG will merge. The combined Mittal Steel will be the largest and most global steel company in the world and will be listed on the New York Stock Exchange and Euronext Amsterdam.

LNM Holdings is one of the world’s largest and most profitable steel companies and also has substantial mining assets. Revenues were $9.9 billion and operating income was $3.2 billion in the first nine months of 2004. The company has annual total raw steel production capacity of over 32 million tons and owns significant mining assets, annually producing approximately 18 million metric tons of iron ore, 13 million metric tons of coke and 12 million metric tons of coal.

Under the terms of the agreement with LNM Holdings, Ispat International will issue 525 million new shares, valued at $13.3 billion to the shareholder of LNM Holdings. The new shares will comprise approximately 140 million class A shares and approximately 385 million class B shares, which is in the same proportion as the Ispat International shares currently held by LNM Holdings’ controlling shareholder.

Under the terms of the agreement with ISG, ISG shareholders will receive $21.00 per share in cash and a number of Mittal Steel shares equal to $21.00 divided by the average closing price of Mittal Steel for the 20 trading days prior to closing, up to a maximum of 0.6087 shares and a minimum of 0.4793 shares. The value in the merger would be $42.00 per ISG share, or $4.5 billion in the aggregate if the average price of Mittal Steel shares for the 20 trading days prior to the merger were between $34.50 and $43.81 per share. ISG shareholders will be able to elect between cash and Mittal Steel shares, subject to pro ration such that 50% of the total consideration will be in cash and 50% will be in Mittal Steel shares.

The companies have signed a Letter of Agreement with the United Steelworkers of America and the Independent Steelworkers Union.

Upon completion of both transactions, Mittal Steel will be the largest and among the most profitable steel companies in the world.

Lakshmi N. Mittal will be chairman and chief executive officer of Mittal Steel. Wilbur L. Ross, chairman of ISG, will become a board member of Mittal Steel. Aditya Mittal will be president, group chief financial officer and a board member. Malay Mukherjee will be chief operating officer. Rodney Mott, president and chief executive officer of ISG, will become chief executive officer of Mittal Steel’s combined U.S. operations.

“These transactions dramatically change the landscape of the global steel industry,” said Mr. Lakshmi N. Mittal. “We are bringing together Ispat International, LNM Holdings and ISG, one of the largest integrated steel producers in North America, creating a global powerhouse. In recent years, the steel industry has been characterized by predominantly regional consolidation. This combination represents a significant step forward in the globalization of the industry.”

Mittal Steel’s strategy will be to enhance long-term shareholder value both by continuously strengthening its position as a low-cost, high quality steel producer and by continuing to play an integral role in a globally diverse steel industry. The company is well positioned in key areas that management believes will experience significant growth in steel consumption. The combined company will encompass all aspects of modern steelmaking to produce a comprehensive portfolio of both flat and long steel products to meet a wide range of customer needs. It will serve all the major steel consuming sectors, including the automotive, appliance, machinery and construction sectors.

Ispat International operates in six countries in North America and Western Europe, including the U.S. through Ispat Inland Inc. Ispat International has annual total raw steel production capacity of over 18 million tons and is targeting 2004 revenues of approximately $8.3 billion.

LNM Holdings operates in eight countries in Europe, Africa and Asia. It has annual total raw steel production capacity of over 32 million tons and is targeting 2004 revenues of approximately $14.5 billion.


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