Arcelor Mittal

(MT) - Get Report

plans to initially pay an annual dividend of $1.30 a share as part of a plan to return 30% of net income to shareholders per year.

The steel giant also plans to start a share buyback program to help meet the payout commitment, the company said Wednesday. The sum of the dividend and buyback each year will represent 30% of annual profits.

The new policy comes following the merger of

Mittal Steel

with

Arcelor

in June. The distribution will be implemented Jan. 1 for the 2006 results.

Arcelor Mittal reiterated that it expects pro forma earnings before interest, taxes, depreciation and amortization of $15 billion to $15.6 billion for 2006. The company expects targeted EBITDA of $20 billion in 2008.