German steelmaker ThyssenKrupp AG has offered 3.5 billion euros (approx. U.S. $4.1 billion) to buy the Canada-based steelmaker Dofasco Inc., topping a hostile bid by European rival Arcelor SA of $3.75 billion made on Nov. 23.

ThyssenKrupp said on its offer of CAD $61.50 (approx. $52.63) per share -- which was approved by Dofasco's board -- could be raised if there were a counter-offer for the Ontario, Canada-based steelmaker, which is Canada's largest by sales.

Arcelor said it would review ThyssenKrupp's offer for Dofasco before deciding if it would make a counteroffer. "It's still too early to say that we aren't still interested in Dofasco," Guy Dolle, CEO, said. "We still haven't analyzed the content of the proposal of Thyssen. It's not a surprise to us. We knew they were talking. Any decision we take will be in line with our values and those of our shareholders."

ThyssenKrupp said there would be no job cuts at either company because there was expected to be very little overlap between them. It added that the deal, which it plans to finance with cash, would add to earnings in the first year.

ThyssenKrupp's offer comes amid a flurry of deals in the steel industry. Earlier this year, Mittal Steel made itself the world's biggest steel company after buying U.S.-based International Steel Group in a deal worth $4.5 billion.

ThyssenKrupp said the acquisition would strengthen its position in North America and would underline its strategy of globalizing operations in flat steel.

Dofasco CEO Don Pether said both companies had been working together for "many, many months" without any talk of an acquisition. But when the hostile bid from Arcelor arrived, Dofasco contacted ThyssenKrupp to gauge its interest.

"When the unsolicited Arcelor bid came in, we did contact Thyssen to determine whether they had any interest...this took it to a whole new level," Pether said. (Reuters)