Arcelor Mittal is the world's largest steel company formed by the 2006 merger of Arcelor and Mittal Steel. Arcelor was the largest steel producer in Europe while Mittal Steel was one of the world's largest. The $33 billion merger combined the two companies to form ArcelorMittal with global steel production of 10% and over 300,000 employees. While the merger created scale efficiencies, the combined company struggled with integration challenges and was heavily impacted by the global recession in its early years.

1. ATHARVA INSTITUTE OF MGT STUDIES
MERGERS AND ACQUISTIONS
TOPIC: ARCELOR MITTAL MERGER
PRESENTATION BY:
SANCHITA S.LAD
MMS-3/ROLL NO:A-26

2. THE TWO COMPANIES…………….
MITTAL STEEL
 Was one of the world's largest steel producers by
volume, and turnover.
 Formed when Ispat International N.V. acquired LNM
Holdings N.V. (both were already controlled by Lakshmi
Mittal) and merged with International Steel Group Inc. (the
remnants of Bethlehem Steel, Republic Steel and LTV
Steel) in 2004
ARCELOR
 Was the world's largest steel producer in terms of turnover
 Second largest in terms of steel output.
 Created by a merger of the former companies Aceralia
(Spain), Usinor (France) and Arbed (Luxembourg) in 2002.

3. THE YEAR 2006…
 June 2006 - Mittal Steel and Arcelor reach an
agreement to combine the two companies in a
merger of equals.
 September 2006 - Arcelor Mittal announces new
dividend policy, under which it will pay out 30% of
net income annually.
 December 2006 - sells Thüringen long carbon steel
plant, sells the Italian long carbon steel production
Travi e Profilati di Pallanzeno and San Zeno Acciai
to Duferco, acquires Sicartsa, the leading Mexican
long steel producer, signs a MoU for the Greenfield
project in Orissa,

4. RESULT
 The merger resulted in the creation of the world’s
largest steel company.
 2007 revenue - $105 billion
Steel production - 10 percent of global output
320,000 employees
Presence in 60 countries
A global leader in all of its target markets.

5. REACTIONS TO THE TAKEOVER
 Directors strongly opposed the takeover, with
Arcelor's chief executive at that time, Guy
Dollé, even dismissing Mittal as a "company of
Indians".
 The French, Luxembourg and Spanish
governments strongly opposed the takeover.
 The French opposition was initially very fierce and
has been criticized in the British, American and
Indian media as double standards and economic
nationalism in Europe.

6. TOP MANAGEMENT
ArcelorMittal top management set three
driving objectives before undertaking the
post-merger integration effort.
- Achieve rapid integration
- Manage effectively daily operations
- Accelerate revenue and profit growth.

7. CULTURAL INTEGRATION
Most integration initiatives fall short of reaching
their goals during implementation stage and follow-
up.
The company should :
1. Recruit and promote service oriented candidates,
2. Train the workforce in techniques of service
3. Set goals that are based on service
4. Reward an recognize people for higher level of service

8. THE VISIBLE DEATH! (FINANCIALS)
 2007 - Sales increased by 10%
- Net profit increased by nearly 30%
 2008 - Sales increased by 11%
- Net profit decreased by 10%
 2009 - Sales decreased by 47.5%
- Net profit decreased by 98.7%