The document summarizes the acquisition of Arcelor by Mittal Steel to form ArcelorMittal, the world's largest steelmaker. Mittal Steel launched a $22.7 billion offer to acquire Arcelor, which Arcelor resisted by increasing dividends and pursuing other deals. Mittal increased its offer to $32.9 billion and convinced shareholders, despite opposition from France and Luxembourg over jobs and nationality concerns. The merger created a steel giant with over 100 million tons of annual production capacity.

1. ACQUISITION OF
ABHIMANYU SHARMA
ASIMITA KHAJURIA
HITESH SHARMA
SONAL ABROL
B
Y

2. INTRODUCTION…..
THE TWO COMPANY
MITTAL STEEL:
 Mittal steel is the largest producer of
steel in terms of volume and also
largest in turnover.
 Despite Mittal steel industry is based in
Netherlands, it is perceived that the the
company is non- european because its
CEO, Lakshmi Mittal, is Indian.
ARCELOR:
 Was the largest producer of steel in
terms of turnover.
 Second largest in terms of steel output.
 Created by the merger of three
companies:
Aceralia(Spain), Arbed(Luxembourg), U

3. INTRODUCTION…..
ACQUISITION
The acquisition of Arcelor by
Mittal steel led to the creation of
Arcelor- Mittal , the largest
steelmaker in the world. It has
been one of the most controversial
business deals ever. When the
European steel maker bowed by
the Mittal steel.

4.  In January 2006 Mittal steel
offers to the shareholders of
Arcelor to create the worlds first
100million tone plus steel
producer.
 And launched a 22.7 billion
dollars offer to Arcelor
shareholders.
 In June 2006 Mittal and Arcelor
reach an agreement to combine
the two companies in a merger
of equals.

5. CONTROVERSY
 The Arcelor believe that it should acquire other
companies rather than the other way around.
The management was extremely hostile to
Mittal steel’s bid from the beginning. Arcelor
repeatedly played the patriotic card to
convience shareholders to reject the bid. The
CEO of Arcelor dismissed Mittal steel as a
company of Indian and unworthy of taking of a
European company.
 The France government was against a deal
because of worries over the future of 28000
Arcelor employees.
 The government of Luxembourg was against a
deal as well for a variety a reasons.
 However all these attempts went wrong when

6.  Most Indian’s were of the opinion
that the deal was not getting pushed
through because of Mittal’s
nationality.
 The Indian government raised the
issue at several forums, especially
through Commerce Minister Kamal
Nath.
 There were allegations that India
had threatened not to ratify a
taxation accord with Luxembourg
due to the latter’s opposition to the
deal.

7.  The deal was finally clinched when
the share holders of Arcelor agreed
to Mittal steel’s offer.
 Mittal steel had to raised its
valuation of Arcelor to 32.9
combined company holds 10% of
the global market for steel.

8.  Mittal- Arcelor the new entity will
be based on Arcelor’s industrial
model.
 It has been decided that the
management board will have seven
members, four from Acelor and
three nominal from Mittal steel.
 L. Mittal is the CEO and Joseph
kinsch from Arcelor is the president
of the company.

9.  We have quality core assets
 We have a world-class mining business
 We are delivering cost improvement
 We are leaders in automotive steel
 We have a stronger balance sheet

10.  Mittal was awarded Fortune magazines
“European Businessman of the Year
2004”
 Previously, he was awarded “Steelmaker
of the Year” in 1996 by New Steel in the
USA
 The “Willy Korf Steel Vision Award” in
June 1998
 In March 2005, Forbes named him the
third richest man in the world and the
richest non-American, with a wealth of
$25 billion.

11.  World’s largest and most global steel company
with shipment of 83.8 million tones and revenue
of over $84 billion in 2012
 No. 1 high quality steel producer with crude steel
capacity with more than 119 million tons per
annum
 Own steel making facilities in 20 countries
spanning 4 continents
 Employs 2420000 people spanning 49 different
nationalities
 ArcelorMittal sells its steel products primarily
in over 170 countries including the
automotive, appliance, engineering, constructio
n and machinery industries.

12. YEAR ANNUAL SALES(BILLION US$)
2007 $105.21
2008 $124.93
2011 $94.0
2012 $84.2
2013(HALF YEARLY TILL JUNE
30,2013)
$39.9

13.  Initially mittal launched an offer of 22.7 billion
dollars to acquire arcelor
 Arcelor tried many tactics to reject the offer
 Moreover they declared the increase in the
dividend by 85%
 But finally the merger happened at the
valuation of 32.2 billion dollars

14. conclusion
•The business strategy that has made the mittal-
arcelor steel the world’s largest steel maker is a
commitment to consolidate & globalisation & a
willingness to take risks that scare off competitors.
•As the steel industry overall struggled in the
present decade ,mittal steel grappling with financial
problems of its own,continued to expand.
•And as competitors insisted that steel should
remain a regional business.
•Mittal steel persued its vision of becoming a global
giant

15. 1. Why did the French government oppose the acquisition of
Arcelor by Mittal steel?
• Worried about the employees of the
arcelor

16. 2. How did Arcelor try to block the acquisition by Mittal
steel?
•INCREASED THE DIVIDEND BY 85%
•DECLARED THE DEAL WITH THE RUSSIAN
COMPANY “SEVERSTAL”

17. 3. What influence tactics did Mittal employ to clinched the
deal?
•INCREASED THE VALUATION OF
ARCELOR TO 25.8 BILLION
EUROS(32.9 US BILLION DOLLARS)

18. 4. Discuss Mittal’s tenacity in the power struggle for the
acquisition?
•Mittal was very firm in acquiring the arcelor
•Mittal wanted to be the giant player
•He tried to convince the french government that the
employees of arcelor will not be laid off
•Increased the valuation of arcelor to 32.9 billion dollars