Its board said it was concerned about the 'severe consequences that Mittal's proposal could have on the group, its shareholders, employees and customers'.
Arcelor, which is quoted on Euronext Paris, retains Publicis Consultants.
Mittal chairman Lakshmi Mittal will have to convince European regulators as well as Arcelor shareholders to back a deal, which could create a company with a combined value of £22.6bn.
The merged company would employ 320,000 staff with an estimated turnover £39bn, four times the size of its nearest competitor. But job cuts as a result of a tie-up would be met with opposition from the Luxembourg, Belgian and French governments. Luxembourg holds 5.6 per cent of Arcelor, with Belgium owning 2.4 per cent. Arcelor also has plants in France and Spain.
Luxembourg's budget minister Luc Frieden and economy minister Jeannot Krecke have expressed concerns at 'the apparent hostile nature of the bid' and lack of guarantees over employment. The Belgian government has urged both companies to respect labour agreements.
Mittal had proposed €28.21 a share, with a quarter of the bid paid in cash and rest in shares. This would dilute the Mittal family's holding from 88 per cent to 50.7 per cent, with voting rights dropping from 100 per cent to 64 per cent.
Some at Arcelor are concerned the tycoon would retain too much control.