Mittal Steel Co. (MT) raised its bid for rival Arcelor SA by 34 percent to 25.8 billion euros ($33 billion) on Friday, pledging to make "significant changes" to its governance and reduce the Mittal family's stake in the company as part of the offer.

Arcelor, which had dismissed the previous offer to combine the world's largest steelmakers as hostile, said its board would meet to evaluate the new terms.

Mittal's original cash and stock bid valued Arcelor at about 28.21 euros ($36.02) per share, or 18.6 billion euros ($23.75 billion) total. The value has fluctuated with Mittal's stock price, and Mittal is now offering 37.74 euros ($48.19) per share. Arcelor shareholders can choose a mix of cash and stock as long as the cash component does not exceed 29.4 percent.

"We have today announced a materially improved offer, providing an exceptionally attractive premium to Arcelor shareholders," said Mittal Chairman and CEO Lakshmi Mittal. "Not only are we offering a very significant increase in the cash component, but also a greater participation in the combined company."

Mittal said at a news conference in London that the company presented its sweetened offer Friday because it wanted to speed up the deal and could make the revised bid an addendum to the offer formally launched Thursday.

"We will now accelerate our move toward a successful conclusion in this transaction," he said. "I believe it will be in the best interest of all shareholders ... no interest is served by further delay."

Mittal Steel's Chief Financial Officer Aditya Mittal later denied suggestions that increasing the offer was a sign of desperation, calling it an "unbeatable proposal."

Merging the world's top steelmakers would create a company with nearly a 10 percent share of global production and annual revenue of about 56 billion euros ($67 billion). Lakshmi Mittal said the higher offer "reflects our long-term confidence in the health and prospects of the steel industry."

Mittal said it would also adopt a one-share, one-vote structure that replaces a current structure with different classes of stock holding different rights.

If the offer is accepted, Mittal Steel said the family stake in the new combined company "will be around 45 percent in share capital and voting rights." The family currently controls an 87 percent stake.

Mittal said it still intends to relocate the company's global headquarters to Luxembourg, the current base of Arcelor.

Arcelor shares, which had been suspended Friday morning, surged 12 percent to 35.81 euros ($45.73) when they resumed trading. Mittal shares dropped 2.7 percent to 26.60 euros ($33.97).

Arcelor spokesman Jean Lasar said the company's board of directors would meet "to evaluate the details of Mittal Steel's offer, including the new terms and conditions announced today." Lakshmi Mittal said he spoke with Arcelor Chairman Joseph Kinsch on Friday and Kinsch said Arcelor management would discuss the revises offer at a board meeting Sunday.

Since Mittal first announced its interest, Arcelor has resisted and said the best thing for its shareholders is the company's current management and plans.

Arcelor also announced plans to spend up to 7.5 billion euros ($9.5 billion) to buy back almost a quarter of its shares. That move, which had been pushed by Arcelor's board, was seen as a way for the company to defend itself against Mittal.

Belgian and Luxembourg authorities, both of which hold stakes in Arcelor, reacted with caution to the new offer.

Christopher Barzal, spokesman for the French-speaking Belgian region of Wallonia, which holds a 2.4 percent stake in Arcelor, said Wallonia still had concerns over job losses.

"We are most concerned about the industrial project, not the financial criteria," Barzal said, adding Belgium would make up its mind around the end of June.

Earlier this week, Belgian Prime Minister Guy Verhofstadt and the regional leaders of Flanders and Wallonia said they would need to ask more questions about Mittal's bid, despite a commissioned report which said the initial offer was sound.

Luxembourg, which holds a 5.6 percent stake in Arcelor, said Friday that it too would make its decision based on jobs and investment rather than finances.