BS. Base Grp.

RNS No 5802a
BRITISH STEEL PLC
16 July 1999


Not for release, publication or distribution in or into the United States,
Canada or Norway.  The proposed public offer for Hoogovens ordinary shares
(and depositary receipts therefor) will not be made in or into the United
States, Canada or Norway.


                            British Steel plc

             Proposed merger of British Steel and Hoogovens

The board of British Steel plc ("British Steel") is pleased to announce that
Koninklijke Hoogovens NV ("Hoogovens") has reached agreement with its Central
Works Council and trade unions in relation to the merger of British Steel and
Hoogovens.

The full text of the announcement made by Hoogovens, the Central Works Council
and trade unions today is set out below:

"Hoogovens reaches agreement with Central Works Council and trade unions about
merger with British Steel.

This afternoon, after consultations with the Board of Management of
Koninklijke Hoogovens, the Koninklijke Hoogovens Central Works Council has
stated that it is in favour of the proposed merger between Koninklijke
Hoogovens and British Steel.

This conclusion is also based on agreement between Hoogovens and the
international trade unions involved.  The Central Works Council expects to be
involved until the new consultation structure is put into effect.

The Central Works Council considers the merger necessary to speed up
Hoogovens' transition towards a more market-oriented company.  In this respect
important considerations are:

- As consolidation is continuing in important customer sectors and the
European Steel industry itself, Koninklijke Hoogovens is becoming a relatively
small player.  As a consequence the company is less likely to be favoured by
large customers as a main supplier.

- The competition in the European steel markets is shifting from delivering
hot rolled sheet (upstream) towards being able to deliver solutions developed
with customers.

- The multiple metals strategy has strong potential, but needs to be
reinforced.

- Koninklijke Hoogovens' financial position has been strengthened since 1992,
but the company still generates insufficient cash flow to be able to finance
investments in expansion in multiple metals and their applications.

The conclusions of the Central Works Council include a number of
recommendations that have to be fulfilled to make the proposed merger
successful, such as:

- The strategy of the new company should be aimed at strengthening its joint
position in a number of attractive "downstream" market segments and customer
oriented Product Market Combinations.

- A strong management focus on the multiple metals strategy.

- Customer oriented account management based on the multiple metals strategy.

- Expansion of the overall aluminium operation.

- Based on available research capacity, operational knowledge and experience,
development of "IJmuiden" into a metals knowledge centre.

- Within the framework of job rotation transfers must be handled with care.

- Sufficient attention should be paid to cultural differences.

Furthermore, the Central Works Council states that improvements in efficiency
as a result of synergies or application of best practices will not lead
primarily to the reduction of jobs.  The net effect of the efficiency
improvements related to employment cannot be assessed by the Central Works
Council.  The Works Council thinks the new company should be aware of its
responsibility to take the social consequences into account.

The Central Works Council states as a condition the importance of a good
consultation structure in the new company.  The consultation structure should
follow the organisational structure to make sure that the consultation bodies
can consult their respective management.  This means that the Works Council
expects the consultation structure in the (mainly international) Business
Units to be transnational.

The Works Council further states that at corporate level there should be a
European Works Council according to EU guidelines and that for each location
of the new company the appropriate national laws regarding consultation should
be respected.  In the Dutch case this will mean a number of Works Councils and
one Central Works Council.

The Central Works Council states as a condition that in the supervisory board
of the Dutch holding one member should be nominated by the Central Works
Council.

The positive position of the Central Works Council is also based on an
agreement between Hoogovens and the trade unions.  Some elements of this
agreement are:

- Hoogovens is firmly convinced that the merger will reinforce the continuity
of the company; in particular employment will be strengthened in the longer
term.

- All existing collective and individual agreements regarding Hoogovens
activities, both within and outside the Netherlands will be respected.  Hence
the agreements concerning the CAO (Collective Labour Agreement) for the next
two years (until April 2001) for the IJmuiden Social Unit and an employment
pact for a period of five years will remain fully in force.  The existing
agreements will also apply to possible social consequences of the merger and
will be included in the merger agreement.  If necessary, adequate agreements
between Hoogovens and its "social partners" will be made.

- Koninklijke Hoogovens makes it a main point of its policy, including and
especially during this merger, to promote employment and the employability of
its staff as much as possible.  Partly through application of the available
social structures, Koninklijke Hoogovens will do its utmost to avoid the need
for compulsory redundancies.

- Within the new company an adequate, representative consultation structure
will be put in place for consultation at local, national, business unit and
group level.  This applies to both internal and external consultations with
"social partners".  Further detailing and elaboration of this structure will
begin in August 1999.

- Koninklijke Hoogovens endorses the continuing importance of safety and
health at the workplace.  Hoogovens furthermore intends to develop its earlier
intended code of conduct, respecting local good practices, in the new company.

The Board of Management of Koninklijke Hoogovens appreciates the constructive
manner in which the Central Works Council and the trade unions co-operated in
bringing about the merger with British Steel.  This bodes well with further
fruitful consultation and co-operation in the new company."

Enquiries:

British Steel                                                 0171 314 5502
Mike Hitchcock                                                 


This announcement is not an extension of the proposed public offer for
Hoogovens ordinary shares (and depositary receipts therefor), directly or
indirectly, in or into the United States, and it will not be permitted to be
accepted in or from the United States.  Accordingly, no public offer will be
made for Hoogovens's American Depositary Shares.

This press release has been issued by British Steel and Hoogovens.  It has
been approved by Credit Suisse First Boston (Europe) Limited ("Credit Suisse
First Boston") and Warburg Dillon Read, a division of UBS AG ("Warburg Dillon
Read") for the purposes of section 57 of the Financial Services Act 1986.

Credit Suisse First Boston, which is regulated in the United Kingdom by The
Securities and Futures Authority Limited, is acting for British Steel and
no-one else in connection with the proposed merger and will not be responsible
to anyone other than British Steel for providing the protections afforded to
customers of Credit Suisse First Boston, nor for providing advice in relation
to the proposed merger.

Warburg Dillon Read, which is regulated in the United Kingdom by The
Securities and Futures Authority Limited, is acting for Hoogovens and no-one
else in connection with the proposed merger and will not be responsible to
anyone other than Hoogovens for providing the protections afforded to
customers of Warburg Dillon Read, nor for providing advice in relation to the
proposed merger.

END

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