Mittal Steel promised to make changes to its corporate governance, over which Arcelor had previously voiced concerns.

Arcelor's management has rejected the planned deal ever since it was first mooted on 26 January.

Mittal's offer includes one of its shares plus 11.10 euros in cash for every Arcelor share.

"We have today announced a materially improved offer," said Indian tycoon Lakshmi Mittal, the firm's owner.

The news came after shares in both Mittal and Arcelor were suspended earlier in the day.

Euronext's exchanges in Paris and Amsterdam had suspended shares in France's Arcelor, as did Spain's stock exchange, while shares in Mittal Steel were on hold in Amsterdam.

MITTAL STEEL HQ in Rotterdam/London 225,000 employees Steelmaking facilities in 16 countries Customers in 120 countries Shipped 49.2m tons in 2005 Revenues of $28.1bn in 2005

On Thursday, Mittal Steel made its 21bn-euro-bid ($27bn) for Arcelor official.

The merged firms would create the world's largest steel company.

Arcelor will hold a board meeting on Friday to assess the latest takeover offer.