June 26, 2006 — Arcelor’s Board of Directors met on Sunday, June 25 to evaluate and compare proposed revisions to the strategic alliance with SeverStal; and proposed improvements to Mittal Steel's offer.

The Board is unanimously recommending Mittal Steel's improved offer, which consists of a merger proposal effected by way of a mixed share and cash offer that will be followed by the merger of Mittal Steel into Arcelor. The new group, which would be called Arcelor-Mittal, will be listed in New York, Paris, Madrid, Amsterdam, Brussels and Luxembourg.

The Board believes that Mittal Steel's new offer represents a substantial improvement compared to Mittal Steel's preceding offer announced on May 19. The Board notes that all of the Board’s key conditions (presented by the Management Board) as well as the observations made by the European works council in terms of valuation, industrial plan and corporate governance, have been met.

The Board says that the proposed merger agreed to by Arcelor and Mittal Steel provides an additional, significant increase in value to shareholders (+10%). It provides a mixed offer at a price equal to 13 Mittal Steel shares and EUR 150.6 in cash per 12 Arcelor shares, or EUR 12.55 in cash and 1.084 Mittal Steel shares per Arcelor share; a cash offer at a price equal to EUR 40.4 per Arcelor share; an exchange offer at an exchange ratio of 11 Mittal Steel shares per 7 Arcelor shares; and a mixed offer for Arcelor convertible bonds (OCEANEs) at a price equal to 13 Mittal Steel shares and EUR 188.42 in cash per 12 Arcelor OCEANEs

Tenders to the offers will be subject to a pro-ration and allocation procedure that will ensure that in the aggregate the portion of the consideration paid consisting of Mittal Steel shares and the portion of the consideration consisting of cash will be 69% and 31%, respectively.

Mittal Steel’s newest offer represents a 49% improved over its initial offer and a premium of approximately 100% (excluding dividend) on the closing price of Arcelor shares on the day preceding announcement of Mittal Steel's starting offer. The new offer also represents a 108% increase of the cash offer and a 32% increase of the exchange offer.

The Boards says that the negotiated exchange offer ratio implies relative valuations of 60% for Arcelor shareholders and 40% for Mittal Steel shareholders. Therefore, taking into account the cash portion of Mittal Steel's offer, the shareholders of Arcelor and Mittal Steel will hold 50.5% and 49.5% of Arcelor-Mittal, respectively.

Consistent with the Arcelor model, the combined group will be based on the following principles:

• an integrated model based on leadership in high-value-added steel and capturing growth in low-cost developing markets
• industrial excellence through state-of-the-art assets sustained by sound capital expenditure levels
• upstream vertical integration for cost leadership
• focusing on research and development
• commercial leadership based on Arcelor's strong distribution channels
• best standards in terms of health and safety and protection of the environment
• best standards in terms of ethics standards and sustainable development
• best practices in terms of social dialogue and social responsibility
• commitment to comply with industrial plans and social commitments of both companies
• no restructuring plans nor employee reduction plans within Arcelor in Europe resulting from the merger
• high profitability targets, including a 30% dividend payout target, as part of a broader effort to maximize shareholder returns
• a sound capital structure

The Board notes that Arcelor continues to be opposed to the sale of Dofasco.

The combined group’s corporate governance model would be based on best practices, which corresponds to Arcelor's current practices. Specifically, there will be only one class of shares, and each share will have one vote. The group’s Board of Directors and the Management Board will be separate bodies, and the Board of Directors will be constituted by a majority of independent directors. The Mittal family, which will own 43% of the combined group, will agree to a lock-up for 5 years and a standstill at 45% of the combined group's share capital.

The combined group’s Board of Directors will have 18 members — the 12 members currently in place at Arcelor, including Arcelor's 3 employee representatives, and 6 members nominated by Mittal Steel, of which 3 will be independent directors. Each director will have one vote. The combined group’s Management Board will be constituted by 7 members — the 4 current Arcelor members (the CEO) and the 3 members nominated by the Mittal Steel board of directors. The combined group will be domiciled in Luxembourg.

When Arcelor’s Board of Directors evaluated the new proposal, it compared the merits of the two projects submitted to it from a financial perspective as well as from the standpoint of their respective industrial plans, governance and social commitments. The Board believes that Mittal Steel's revised offer is superior as a whole, in addition to being a significant improvement compared to the arrangements under the existing strategic alliance agreement. The Board’s resolution to recommend the improved Mittal Steel offer was unanimous.

Joseph Kinsch, Chairman of the Board of Directors said, “Intense discussions with Mittal Steel in the past weeks have resulted in a significantly improved offer by Mittal Steel that the Board of Directors is unanimously recommending. The merger will give rise to the leading steel company in the world. The managers and employees of Arcelor have made extraordinary efforts and produced exceptional results in the course of the last five months, which were difficult and full of uncertainties. I congratulate them and thank them on behalf of the Board of Directors. They should be proud and confident in the future.”

Arcelor holds leadership positions in its main markets: automotive, construction, household appliances and packaging. The company targets further expansion internationally in order to capture the growth potential of developing economies and offer technologically advanced steel solutions to its global customers. Arcelor currently employs 110,000 associates in over 60 countries. The company places its commitment to sustainable development at the heart of its strategy and ambitions to be a benchmark for economic performance, labor relations and social responsibility.