MERGER OF ARCELOR AND MITTAL STEEL

Presented By :
GROUP NO. 6
NAME OF STUDENT ROLL NO. TOPIC
Singh Aditya 45 Introduction
Tawte Shweta 52 Reasons for Merger
Panchal Snehal 24 Timeline for Merger
Jha Sudhir 11 Financial Aspect & Stock Price
Ambre Pratima 01 Impact Of Merger
Dhuri Mamta 07 Conclusion & Present Scenario
Mishra Amit 18 ABSENT
Type Public
Industry Steel
Successor ArcelorMittal
1976 in Calcutta, India, 1989 as Ispat International in
Founded
Sumatra, Indonesia
Headquarters Rotterdam, Netherlands
Key people Lakshmi Mittal, Founder, Chairman and CEO

Products Steel, Flat Steel products, Coated Steel, Tubes and Pipes

Revenue $28.132 billion USD Year to 31 Dec 2005

Operating income $4.746 billion (2005)
Net income $3.365 billion (2005)
Employees 320,000 (2006)
 Mittal Steel Company was formed by the merger of
• LNM holdings & ISPAT International
• International Steel Group Inc.

 CEO Lakshmi Mittal’s family owned 88% of the company and its headquarter
was in Rotterdam, Netherlands

▪ The company was the world’s largest steel producer by volume and also the largest
in turnover and is now a part of ArcelorMittal

▪ It was the major player in Steel, Flat Steel products, Coated Steel, Tubes and Pipes
 Type Public

Industry Steel

Fate merged with Mittal Steel

Founded 18 February 2002

Headquarters Luxembourg City, Luxembourg

Products Steel

Revenue € 32.611 billion (2005)

Employees 94,000

Website www.arcelor.com
• Arcelor S.A. was the world's largest steel producer in terms of turnover and the
second largest in terms of steel output, with a turnover of €30.2 billion and
shipments of 45 million metric tons of steel in 2004.

• Employing 4,10,000 employees in over 60 countries, it is a major player in all its

main markets: automotive, construction, metal processing, primary transformation,
household appliances, and packaging, as well as general industry.

• With total sales of over €30 billion, Arcelor was the world's largest steel
manufacturer in terms of turnover.

• It produces long steel products, flat steel products and inox-steel.

 Type Public
Founded 2006
Headquarters Avenue de la Liberté, Luxembourg, Luxembourg
Area served Worldwide
Lakshmi Mittal (Chairman of the board and CEO)
Key people
Aditya Mittal (CFO)
Industry Steel
Steel, flat steel products, long steel products, stainless steel, wire solutions,
Products
plates
Revenue US $124.9 billion (2008)
Operating income ▲ US $12.24 billion (2008)
Profit ▲ US $9.399 billion (2008)
Total assets US $133.1 billion (2008)
Total equity US $59.23 billion (2008)
Employees 315,900 (2008)
 Reason for Merger and Acquisitions of
ArcelorMittal

1.POLITICS 2. MARKET 3. TECHNOLOGY 4. DEMOGRAPHY

5.ECONOMIC 7. CULTURAL & 8.THE INDUSTRY

6. GLOBAL SYSTEM
INPUT FACTOR RELIGIOUS ISSUE
 MERGER OFFER AND SUBSEQUENT NEGOTIATIONS:

• 27 January 2006 – Mittal announces EUR 18.6 billion (about US$24.4 billion) cash and shares offer.
• 29 January 2006 – Arcelor rejects Mittal's proposal as "hostile“
• 4 April 2006 - Arcelor announces return of more than EUR 5 billion (about US$6.6 billion) to shareholders and puts
Dofasco into Dutch foundation
• 18 May 2006 - Mittal offer officially opens following regulatory clearance in France, Belgium, The Nether and sand
Luxembourg
• 19 May 2006 – Mittal raises offer to EUR 25.8billion (about US$33.9 billion)
• 26 May 2006 - Arcelor announces deal with Severstal
• 31May 2006 - 20 to 30% of Arcelor shareholders sign a letter demanding the right to choose between the Severstal and
Mittal proposal
• 25 June 2006 - Arcelor board recommends increased Mittal offer of EUR26.9 biIlion (about US$35.3 billion)
• 26 July 2006 - 92% acceptances announced
• 17August 2006 - Closing of the subsequent offering period (93.7% acceptances announced)
• 17 November 2006 – Closing of the mandatory sell-out period (less than 95% acceptances announced).
 IMPACT OF MERGER & ACQUISITION

1.On workers or employee

- layoffs

2. On top level management

-Clash of ego
-Variations in culture

3. On shareholders
- Acquiring firm
- Target firms
 CULTURAL PROBLEMS ADDRESSED

1.Communication
- Between different cultural &Time zone.

2.Avoid Redundancies
- Introduced a measures to avoid forced redundancies
date,
- launched VRS and early retirement programs,
- Flexible rotating work schedules at various side.
FINANCIAL ASPECT
RATIO ANALYSIS
GROWTH LEVEL :
STOCK PRICE MOVEMENT
 CONCLUSION
• GAINS FROM THE MERGER
 Leading steel & mining company
 Presence in more than 60 countries
 4th largest producer of iron ore with global portfolio of 13 operating units with mines in
operation or development.
 Production capacity – approx 118 million tonnes of crude steel
 Employee strenght – 2.09 lakhs
 R & d – 11 major research centres worldwide
and r & d expenses was $290 million in 2018.
 Listed on various stock exchanges.