1) Lakshmi Mittal started a small steel mill in Kolkata in the 1970s and later expanded internationally through acquisitions as opportunities for growth were limited in India. He established operations in Indonesia in 1976 and continued acquiring steel mills across the world. 2) By 2006, Mittal Steel had acquired Arcelor, creating ArcelorMittal and making it the largest steel producer in the world. However, the acquisition faced opposition from the French and Spanish governments who were concerned about job losses and economic impacts. 3) While international expansion provided benefits like increased revenues and market access, it also had drawbacks such as reduced sovereignty and competition for local producers. Overall, the case study examines Lak

1. 1/11/2014
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3. SUBMITTED BY
MEHVISH REHMAN

4. SUBJECT:
INTERNATIONAL BUSINESS
TOPIC:
CASE STUDY

5. 1/11/2014
BBA (5TH)
G.P.G.C FOR WOMEN
S/TOWN RWP.
5

6. SENERIO
Lakshmi was born on 15 June 1950.
His father named Mittal start a small
steel mill in Kolkata.
Lakshmi started his career in 1970.

7. SENERIO
In early 1970 company face limited
growth opportunities in India.
In 1975 his father financed him and he
start business in Indonesia in 1976

8. CONTIUE………
Trindian impressed by growth of Mittal
and invite him to start business in his
country under a contract.
In 1989 Mittal purchase plant of
trinilandian.

9. Steel industry had been in slump for
quarter of century because of ;
Excess capacity of steel.
Slow growth of demand.
Substitute material of steal available.

10. CONTIUE………
Lakshami saw opportunity and
purchase all raw material of all
distressed industries at low cost.
He injected all material with capital and
improve their efficiency by adopting
high technology.

11. so, In
1992: Acquire Sibalsa in Mexico.
1994 : Purchase 4th largest Canadian
steel mill.
1995: Acquisition of mid sized
steel mill.
German

12. After acquiring large numbers of mill he
still hungry for more success.
He decide to generate capital by issuing
shares in all these countries except India
and Indonesia because of limited liquidity
of capital market.

13. CONTIUE………
Capital generated from IPO Mittal
purchased 2 more German steel maker.
In 2005 : Mittal Steel takeover of the
International Steel Group, USA.
That time was again the time of boom in
steel industry and steel prices hitting
highs.

14. CONTIUE………
On August 1, 2006, Mittal Steel acquired
91.9% of the share capital of Arcelor.
Through subsequent transactions Mittal
Steel increased its ownership to 94.2%,
which included the issued & outstanding
shares of Arcelor and all of Arcelor’s
convertible bonds.

15. CURRENT SITUATION
Headquarter in Netherlands.
The world largest steel producer
company.
Highest revenue earning industry.
Biggest direct reduced iron producer.
No1 richest person of the Europe.

16. No 4 richest person of world.
Now 224000 employees operate in 49
different nations.
Mittal steel strategy is aimed at creating
value through steel cycle.
Focus on global marketing effort.

17. QUESTION # 1.
There are several forces that played a role
in Mittal Steel expanding across the
border.
The company was facing limited growth
opportunities because of
govt rules and regulations and strict
competition from the
state owned and private competitors.

18. There are high growth opportunities in
other countries such as Indonesia, Mexico,
Kazakhstan & German etc

19. QUESTION # 2.
Mittal expended his business through
acquisition instead of green field because ;
It is less costly than green field.
Less risky.
Need less efforts & Less time consuming.

20. Labors, technologies or machinery &
equipment is already installed.
Easy to execute because everything
already established.
Not have to face more barriers.

21. QUESTION # 3.
BENEFITS FOR THE COUNTRY WHERE
ENTER:
Provision of employment.
Take part in the development of the
country.
Economy of the country become stable
due to investment.
Standard of living of the people increases.

22. GDP of these countries increases.
Resources, technologies, capital & skilled
labors come in the country.
Have positive effect on capital a/c &
current a/c.

23. DRAWBACKS:
Acquire the market of that country.
Discourage local steel industrialists or
producers.
Use the land, labor & resources of that
country & generated revenue send back
to the home country (India).
Sovereignty or independence of that
country decreases

24. QUESTION # 4.
BENEFITS TO MITTAL STEEL:
Expending & growth of the business.
Generate revenue by doing FDI.
Learn different skills from the labors of
the country where invest.
Inward flow of earning.

25. It is the source of efficient production to
enter in the countries where produce
more efficiently.
Get wide & large market in different
countries by setting plants in different
countries.
Enter into economically developed
country.

26. QUESTION # 5.
The acquisition of Arcelor by Mittal led
to the creation of Arcelor-Mittal, the
largest steel maker in the world.
It has been one of the most
controversial deals ever, but Mittal
faced many objection & opposition of
management of France & Span Govt.

27. THEY OBJECTED BECAUSE:
France Govt was against the deal because
of worries over the future of about
28,000 Arcelor’semployees.

28. CONTIUE………
France Govt also against it because of its
effect on economy, as the revenue
generated by the Arcelor will start flow
towards India.
Mittal become dominant in the France.

29. CONTIUE………
WERE THE OBJECTION REASONABLE OR NOT?
It is reasonable to some extent as,
Mittal become dominant.
Future of about 28,000 employees were at risk.
BUT IT ALSO HAVE MANY BENEFITS:
GDP of the country increases.
It have positive effect on capital a/c & current
a/c.

30. CONCLUSION
Earlier research has shown that FDI by
MNEs contributes to economic growth.
Domestic investment may accelerate
economic growth but new technology is
usually acquired through FDI.

31. FDI has promoted to effective economic
growth and the role of the foreign direct
investment in this field has been
extensively known in China and
India,economics have been using FDI as a
stimulus in the growth process for their
business.

32. CONTIUE………
The growth theory says, Export and FDI
have played a crucial role in the growth of
the business, because FDI, export and
economic growth have triangular
relationship.

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BBA (5TH)
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