The document discusses the controversial acquisition of Arcelor by Mittal Steel, highlighting the motivations behind the deal, such as a significant premium offered and the goal of creating a top global steel producer. It details the ensuing challenges, including resistance from Arcelor's leadership and government, and the financial outcomes post-acquisition, showing increases in revenue and profit. Ultimately, it reflects on the risks and achievements of Laxmi Mittal in transforming the steel industry landscape.

1. The Acquisition Of
Darsh Shah
Karan Kumar Kedia
Monika Sajnani
Sneha Malpani
One of the Most
Controversial Deals Ever!

2. Acquisition Explained
An acquisition is the purchase of one company
(the target) by another (the acquirer, or bidder)
which leads to the transfer of control over a
firm from one group of shareholders to another.
Types of Acquisitions: -
Friendly
Hostile

3. Founded in 1989 as Ispat International by Mr.
Lakshmi Mittal
The largest producer of steel in terms of volume
Based in the Netherlands
Formed in 2002 by a merger of the former
companies Aceralia, Usinor and Arbed
Second largest producer of steel in terms of
volume
MITTAL STEEL
ARCELOR
Introduction to the Companies

4. THE COMPETITION
Top Steel Producers (2005)

5. Mittal's long history of M&As
Benefits of Acquisition: -
Improved sources of raw materials
Access to more markets
Better utilisation, and better efficiency
Elimination of biggest competitor
WHY?
Why this Acquisition? Why Arcelor?

6. First; 27% premium
Second; Increase by 38%
(Late May)
Mittal Steel offered Arcelor’s
shareholders to create the
world's first 100 million
tonnes plus steel producer.
The
BIDs

7. Citing Cultural Differences
Buyback of shares and dividend payouts
Resistance from the Govt. of Luxembourg
Guy Dolle attempts
DOFASCO (Poison Pill Strategy)
Severstal (White Knight Strategy)
The Controversy and Resistance
by Arcelor

8. Tactics
Employed by Mittal
Claim of being not an INDIAN
company
Shift from friendly to hostile
Bearhug
Increasing price of Arcelor shares
upto a premium of 93% with EU’s
approval

9. ArcelorMittal was created by the takeover of
Western European steel maker Arcelor (by
Indian-owned multinational steel maker Mittal
Steel in 2006, at a cost of €40.37 per share,
approximately $33 billion total.
The DEAL

10. Was the Acquisition
Profitable?
The revenue increased from $28 billion to $105
billion.
Net Operating Income increased from $4.7
billion to $14.8 billion.
Net Profit increased from $3.36 billion to $10.36
billion.
Enlarged market share.
Economies of scale
Increase in the share value by 9.9% to $52.99.

11. Losses Incurred
Sales down to 10% in 2010
Steel prices slumped
Debt of $22billion in 2012
Compensation of $150 million to SENEGAL
government

12. Partnership
with Nippon
Steel
Corporation
(NSC)
2013
Acquired
ThyssenKrupp Steel
USA in Calvert,
Alabama
Celebrates the
10-year
anniversary of
the merger
between
Arcelor and
Mittal Steel
2016
Essar Steel’s
Committee of
Creditors
approved
ArcelorMittal’s
acquisition of
Essar Steel
2018
AM/NS India's
first-time
entry into the
high-growth
Indian steel
market
2019
Timeline
Joint acquisition by
ArcelorMittal and
NSC
Announced its
first annual
profits in five
years
2017
A joint venture
between
ArcelorMittal and
SAIL, India
Announced
offer for Ilva,
an Italian
steel-making
company

13. Headquarters in Luxembourg
1,68,000 employees
Mega steel project in
Kendrapara District
50,000 Crore Investment
Dofasco Plant in Hamilton
ArcelorMittal
Today

14. Vision, Mission & Values
Sustainability
Quality
Leadership
Mission Statement
To supply flat steel produced in a sustainable, safe and
market-oriented way with management excellence.
Vision Statement
To be the most admired steel producer in the world: a
benchmark for the global steel industry.
Values

15. Business Strategies
Three Dimensional Strategy for Sustainability
and Growth
Product Diversification
Carbon & Stainless Steel
Customer
Diversification
180 Countries
Geographical
Diversification
20 Countries & 4
Continents
UpStream &
DownStream Integration
Value Supply Chain

16. Expertise in acquisition and
mergers
Strong distribution network
Good performance in new
markets
Decreasing cost of
transportation
Capital procurement
New environmental policies
New challenges
High Attrition Rate
R&D
Liability Laws
Intense Competition
No regular supply of
innovative products.
Analysis

17. China’s BAOWU Steel
Top steel producing
Company
115.29 Million tons of
production in 2020
Major
Competitors

18. Movement of Stock Prices

19. Conclusion
Mittal Steel took a high degree of risk.
But succeeded in laying off its biggest
competitor.
Despite many obstacles, Laxmi Mittal
achieved his vision of becoming the sole giant
of the steel industry. (Till 2020)

21. Q1. The list below contains the companies
acquired by a social media company. Name
the Company.

23. Q2. X, an E-learning startup acquired a brick
and mortal coaching institute Y for a $950
million deal.
Identify X and Y.

25. "X is acquiring a majority stake in diagnostics chain Y, in
what the online pharmacy claimed was the first ever
acquisition of a listed company by an Indian startup
unicorn."
Q3. The line below is an excerpt from the
Economic Times, India on 26th June, 2021.
Identify X and Y.

27. Q4. X on 28th May, 2021 said it has acquired a
majority stake in online grocery Y, a deal that
pitted the country’s largest conglomerate
against entrenched E-commerce players.
Identify X and Y.

29. The Economic Times
Stifel
Investopedia
ArcelorMittal
PhDEssay
The Mint
Wikipedia
Instead, France
Mba Skool
YouTube
Acknowledgements