Mittal chief executive Lakshmi Mittal said he did not expect the proposed deal to face any regulatory hurdles and that the group would begin "friendly discussions" with Arcelor and with European regulators soon. But the Luxembourg-based steelmaker dismissed such gestures and said it considered the takeover bid as hostile.

Arcelor's board is scheduled to convene Sunday to discuss the move, which has shocked many in the Grand Duchy. The steelmaker is the country's largest employer with some 6,000 jobs in four locations and the state is a stake-holder.

"The government is going to wait for the board of directors to take a position before setting out its position," Luxembourg Economy Minister Jeannot Krecke told a news conference. "We have a strategy and several options remain open," he said without going into detail.

Prime Minister Jean-Claude Juncker will meet with the Indian tycoon on Tuesday.

A European concern

Meanwhile, French Economy and Finance Minister Thierry Breton said his government was "concerned" and was following developments "with the greatest attention" because of "its implications for European and French industry and employment."