HispanicBusiness

The French government is considering a compromise with steel giant ArcelorMittal to end a row over the steelworks which the government has threatened to nationalize, media reports said Friday.

The reports came a few hours before a midnight deadline for the government to find a buyer for ArcelorMittal's two blast furnaces in the eastern Lorraine region.

The government has threatened to nationalize ArcelorMittal's entire operation at Florange unless the company agrees to sell the entire site.

Industrial Recovery Minister Arnaud Montebourg has said the nationalization would be temporary, until a new investor takes over.

ArcelorMittal has refused to sell the entire site, which includes a healthy steel processing business, saying it only wants to close the furnaces because of falling European demand for steel.

Montebourg's nationalization threat has shocked investors in France and abroad, which sees it as proof of an anti-business slant in President Francois Hollande's left-wing administration.

Laurence Parisot, head of employers federation Medef, has warned that nationalizing the site would be "scandalous."

ArcelorMittal has said it would jeopardize its entire French operations, which employ 20,000 people in total.

According to Les Echos financial daily and France Info public radio, the compromise under discussion would see the company commit to keep on all the 629 workers who face redundancy if the furnaces are shut.

Under such a deal, the company would also commit to invest heavily in its other French sites, Les Echos said.

Prime Minister Jean-Marc Ayrault is said to favour such a deal, according to France Info.

The decision now rests with President Francois Hollande and Indian steel baron Lakshmi Mittal. Hollande was expected to announce a decision later Friday.