ArcelorMittal to take $4.3bn goodwill writedown ArcelorMittal, the world's biggest steelmaker by sales, on Friday said weak European demand meant that it would have to take a goodwill impairment charge of about $4.3bn in its fourth-quarter accounts. The company, which is led by Indian billionaire Lakshmi Mittal and has just resolved a bitter dispute with the French government over the future of one of its plants, blamed a "weaker macroeconomic and market environment in Europe." Steel demand in Europe had fallen 8 per cent this year, it said, bringing the cumulative decline since 2007 to 29 per cent. Europe accounted for almost half of ArcelorMittal's total steel output last year. "This weaker demand environment, and expectations that it will persist over the near and medium term, led to a downward revision of cash flow expectations underlying the valuation of the European businesses," it explained. In the first nine months of this year, ArcelorMittal's main European plants accounted for a cumulative operating loss of $823m. Shares in ArcelorMittal fell 2.6 per cent to €12.87 in morning trading on Friday. They have fallen by 6 per cent over the past year but were worth more than €60 at one point in 2008 before a prolonged downturn in the steel sector. Goodwill is the optimistic asset that is created when the price of an acquisition exceeds the value of the target's net identifiable assets. The International Financial Reporting Standards accounting rules followed by listed companies in the European Union require an annual test to see if the previously stated value is still justified by the company's expectations of future performance. ArcelorMittal said it had $12.4bn of goodwill on its balance sheet before the writedown, chiefly arising from the €26.9bn contested acquisition of Arcelor, a European steelmaker, by Mittal Steel in 2006. Goodwill impairments at large listed European companies soared to €76bn in 2011 as executives were forced to revisit upbeat projections underpinning past acquisitions, according to research by Houlihan Lokey, the US investment bank. The writedowns, which are non-cash charges, were expected to ease somewhat in 2012 but remain much higher than the €14bn total posted in 2010.