Arcelor, the European steelmaker coveted in a hostile takeover assault from Dutch rival

Mittal

(MT) - Get Report

, has located its white knight.

Luxembourg-based Arcelor announced an agreement Friday to merge with Servestal, the company that made Alexei Mordashov one of Russia's richest men. Mordashov will end up controlling 32% of the combined entity, making him its largest shareholder and giving him six of 18 board seats.

Arcelor's Guy Dolle will remain chief executive of the combined firm.

According to Arcelor, the merger, in which Servestal is acquiring about one-third of Arcelor, values its shares at a little over $53 apiece, or about 20% more than Mittal's. Mittal's bid, which was raised by about $6 billion to roughly $30 billion last week, was for the whole company.

Mittal disparaged Friday's transaction.

"Yet again, the board appears to be manipulating its shareholder base to its own ends. The vote to veto is unprecedented and prevents the shareholders from having a real choice in the future of their company. The result would be a second-class combination," Mittal said. "Only the Mittal-Arcelor combination, which is superior in every way, offers true step-change consolidation."