Mittal Steel and Arcelor, the world's two biggest steelmakers, will be wary of overpaying for a stake in Turkey's state-controlled Erdemir, the country's largest steelmaker, after its share price rose 46 percent this year. Erdemir's share price has risen in anticipation of a high offer for the company after European steelmakers made record profits.

“Erdemir is important for our strategy,'' Lakshmi Mittal, billionaire owner and chairman of Mittal Steel, said yesterday in an interview in Seoul. “But not at an irrational price''

“It's an interesting and important steel company.'' Chief Executive Guy Dolle said in an interview yesterday. Still, “we have to justify the price we pay to our shareholders.''

Corus Plc, which pulled out of the race as it could not find a Turkish partner, CEO Mr Philippe Varin said “In July, the market capitalization was in the range of $2 billion. It's now in the range of $3.5 billion and we don't think this would give a profit back to our shareholders.''

Erdemir would give Mittal Steel a foothold in Europe's car-steel market, allowing it to catch up with Luxembourg-based Arcelor. Erdemir sold 18 percent of its steel to carmakers last year. It produced 1.1 million tons of cold rolled steel used for auto panels. Ford Motor Co. and Toyota Motor Corp. are among its customers.