In this and the next post, I would try to give an account as to how the “impossible” Arcelor-Mittal merger became possible.

With a large number of parties involved, with different cultures in play, and a lot at stake, this deal promises to give many insights into the negotiation techniques used.

Background

Mr. Lakshmi Mittal founded Mittal Steel in 1976 in India. After a few years, Mr. Mittal found that it would take him long to grow to a significant size and wanted a way to grow fast. He found that there were various steel companies around the world, which had been performing badly, due to cyclical nature of the industry and poor management of the companies. He started acquiring these companies and turning them around through better management and economies of scale.

In 2005, when Mittal Steel acquired the American steel company, ISG, it overtook Arcelor as the world’s largest steel maker, in terms of output. Towards the end of 2005, it made up its mind to acquire Arcelor, the second largest steel producer by output and the largest by turnover. Mittal Steel was headquartered in Netherlands.

Arcelor was created in 2002 through merger of three major European steel companies, Arbed (Luxembourg), Aceralia (Spain) and Usinor (France). The idea was to leverage their technical, industrial, and commercial resources in order to create a global leader in the steel industry. It was headquartered in Luxembourg and Mr. Guy Dollé was the CEO. Arcelor employed thousands of people across 60 countries. Most of the employees were from Western Europe and in countries with a traditionally strong labor union. Arcelor were still in the process of integrating the business and were neither expecting nor ready for any deal, let alone a takeover offer.

It is important to understand where the main people stood when the deal was proposed. This is because, finally it is after all these individuals who would consider and negotiate the deal. The personal interests would play a critical role in the entire process.

Mr. Mittal, aged 55 and Mr. Dollé, aged 63 shared the same vision. They believed that the steel industry was too fragmented (top 5 companies controlled just 20% business) and was being exploited by the raw material / commodity producers (top 3 iron ore companies controlled 70% business) as well as consumer companies (top 5 automobile companies control 70% business). Consolidation was required and both wanted to emerge as the leader once it gets achieved. Both had contributed their fair share to this process of consolidation in the industry. Their aim was to do things in a way that, before they retire, the companies reach a dominating position in the industry. And that they are considered responsible for that leading position of their companies.

The Offer

On January 27, 2006, Mittal Steel unveiled an unsolicited $22.7 billion bid for Luxembourg-based Arcelor.

As we have already seen, that both companies had been acquiring others in the industry. Both thought that it was a competition against each other. They had been part of various bidding fights for acquisitions of steel companies. But at least one side was not thinking of both going hand in hand against all others.

In one such typical bidding, the steel company, Kryvorizhstal of Ukraine was on the block. Many companies entered the fray and the price kept on increasing. Mittal Steel and Arcelor were the last two remaining in the tussle, and the price increased from $3.5bn (when the last company left leaving these two) to $4.8bn where Mittal Steel won the bid.

There was clear scope for “saving” money in such context. Mr. Aditya Mittal, son of Lakshmi Mittal, was of the view that there were a large number of synergies between the two companies – not to mention getting better valuations while buying different companies. There were complementary strengths that could be leveraged. After intense internal discussions, they decided to take the leap, and find ways to make this acquisition possible.

The Process of the Initial Offer

Generally, in such acquisitions, the acquirer company would like to have a co-operative discussion and settlement. After acquiring, the acquirer is dependent on the target firm for collaboration – from executives, employees etc. In addition, the acquirer would like to be seen not as a predator but someone who would make the company achieve greater heights and also help the employees improve their standard of living – something which makes it preferable to go for a co-operative process.

As we know that, they finally had to resort to go towards a competitive process but they did that when it became a necessity. I believe one has to be ready for this as well for the other side’s rationale might be very different and sometimes there might be seemingly irrational behavior as well that would necessitate such a process.

Whom to approach – The best foot forward

One important issue is how the discussion with the target should get started. Research suggests that extroversion, agreeableness and cognitive ability of the negotiators play a major role in the negotiation. So, a person on the other side with these attributes should be preferred, especially when it comes to the initial stages. This particular person is the potential harbinger of the proposed deal in the target.

The Mittals found such a person at Arcelor – Mr. Alain Davezac, Senior Vice-President, International Business Development, Arcelor (Cognitive Ability). He had been dealing with the extended Mittal family before (Agreeableness) and was an outgoing person (Extroversion). He was enchanted with Buddhism and had dealt with Indians & Indian Companies extensively before in his career.

Mr. Aditya thought that it was important to make Mr. Alain up to terms with what has been going on at the Mittals side, and show him the benefits of the collaboration between the two companies. In addition, if everything goes on well, it is Aditya and Alain that would have to do bulk of the work during integration, and so it was best that they became acquainted with each other at the earliest.

Where to discuss and the occasion?

Issues such as where do the meetings take place; who all are part of the meeting; how are they treated etc, though they might seem trivial, play a very important role.

After discussions with Alain for some time and a couple of meets, the Mittals thought that it was now time to involve the CEO of Arcelor, Mr. Dollé. Instead of having a formal meeting at some office or hotel, Mr. Dollé and Mr. Alain were invited to a dinner meeting on 13th January, 2006 at the grand Mittal’s home in London (the world’s most expensive house at that time). We believe that it was a way to show the other party that they would be dealing with someone who is not less equal in any possible way. It was also to settle any apprehensions regarding the Mittal’s ability to handle the large company, that might arise once they come to know about their proposal. The Mittals might also be looking to gain an upper hand (through the venue and the fact that they are the hosts) before the start of the formal negotiations.

The negotiations before the negotiation – The notorious dinner

When the dinner was planned, little did anyone know that it would become such a quoted event in the future. The Mittals did not want to indicate on an outright basis that there would be a deal coming. They wanted to explore the possibility and see the reaction of the other side. As per Mittal Steel’s prospectus for the Arcelor offer, the issue of the

merger was brought up at the dinner meeting but Mr. Dollé’s reaction was “non-committal” and that he pointed out the issues that would arise and the risks involved.

The part of the conversation related to the merger was only for 4-5 minutes. Mr Dollé later said that the conversation was friendly but did not give any details. A week after the dinner, both sides decided to meet again to discuss about the merger specifically, but the meeting could not take place as Mr Dollé had to follow-up on their proposed acquisition of the Canadian company, Dofasco.

Now or Never

This was an inflection point in the whole deal. The Mittals knew that if Arcelor went ahead with the Dofasco deal, it would get tougher to merge, possibly due to anti-trust conditions and due to Arcelor becoming a larger company. So that Dofasco can be done away with, they needed to find an alternate for Dofasco in case they are successful in going ahead with merging with Arcelor. They signed a binding agreement with ThyssenKrupp AG (that was also involved previously in bidding for Dofasco) about selling Dofasco to them, after the merger.

Without wasting any more time, the Mittals informed Mr. Dollé (who reportedly hung up on hearing about the Offer announcement) and Mr. Alain on 26th January, 2006 (after markets closed) about their plans to announce an Offer on 27th January. The Mittals had gotten the sense that management at Arcelor, specifically Mr. Dollé would not be too keen on such a proposal. However, they wanted to do as much as possible that would make them look as if the were on the “right” side; and it was their counterparts that did not co-operate.

The offer was announced the next day.

Wiki

ArcelorMittal

From Wikipedia, the free encyclopedia

ArcelorMittal, S.A.

Type Société Anonyme(Euronext: MT,NYSE: MT, BMAD: MTS,LuxSE: MT)

Industry Steel

Founded 2006

Headquarters Avenue de la Liberté,Luxembourg, Luxembourg

Area served Worldwide

Key people Lakshmi Mittal (Chairman andCEO), Aditya Mittal (CFO)

Products Steel, flat steel products, long steel products, wire products, plates

Revenue  US $78.03 billion (2010)[1]

Operating income  US $3.605 billion (2010)[1]

Profit  US $2.916 billion (2010)[1]

Total assets  US $130.9 billion (2010)[1]

Total equity  US $66.10 billion (2010)[1]

Employees 263,000 (end 2010)[1]

Website www.arcelormittal.com

ArcelorMittal is a global steel company headquartered in Avenue de la Liberté, Luxembourg, Luxembourg. It is thelargest steel producing company in the world[2] and is the market leader in steel for use in automotive, construction,household

appliances and packaging. It holds sizeable captive supplies of raw materials and operates extensive distribution networks. The company was formed in 2006 by the merger of Arcelor and Mittal Steel. It ranks 99th on the 2010 Fortune Global

500 list.Contents

 [hide]

1   History

2   Organizational structure

3   Head office

4   See also

5   References

6   External links

[edit]History

Its industrial presence in Europe, Asia, Africa, North America, and South America gives the Group exposure to all the key steel markets, from emerging to mature. ArcelorMittal is looking to develop positions in the high-growth Indian and

Chinese markets.

ArcelorMittal key financials for 2007 show revenues of US$105.2 billion, with a crude steel production of 116 million tonnes, representing around 10% of the world steel output.

ArcelorMittal is listed on the stock exchanges of New York, Amsterdam, Paris, Brussels, Luxembourg and on the Spanish stock exchanges of Barcelona, Bilbao, Madrid and Valencia.[3]

As of 4 November 2008, the market capitalisation of ArcelorMittal was $35.37B.[4]

In December 2008, ArcelorMittal announced several plant closings, including the former Bethlehem Steel plant inLackawanna, NY and LTV Steel in Hennepin, IL.

On 30 June 2010, the European Commission fined 17 steel producers a total of €518M for running a price-fixing cartel, with ArcelorMittal being hit the hardest.

On 26 January 2011, the Stainless steel division split off as a new company, Aperam.

[edit]Organizational structure

Lakshmi Mittal (owner of Mittal Steel), is the Chairman and CEO.

The composition of ArcelorMittal's Group Management Board is as follows: Lakshmi N. Mittal (Chairman and CEO), Aditya Mittal (CFO), Michel Wurth, Gonzalo Urquijo, Sudhir Maheshwari, Christophe Cornier, Davinder Chugh and Peter

Kukielski.

ArcelorMittal's 11-member Board of Directors is responsible for the overall supervision of the company. The composition of the Board of Directors reflects the principles agreed in the memorandum of understanding dated 25 June 2006.

[edit]Head office

Headquarters inLuxembourg City

 

Headquarters in Luxembourg City

 

Headquarters in Luxembourg City

The head office of ArcelorMittal is in Luxembourg City, and 600 employees work there. The building was the head office of Arbed before that company merged withAceralia and Usinor.[5]

[edit]See also

Luxembourg portal

Companies portal

ArcelorMittal Orbit

Mittal Steel Company

From Wikipedia, the free encyclopedia

Mittal Steel Company, N.V.

Type subsidiary of ArcelorMittal

Industry Steel

Founded 1976 in Calcutta, India, 1989 as Ispat International inSumatra, 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)

Website Mittal Steel

Mittal Steel Company N.V. was one of the world's largest steel producers by volume, and also one of the largests in turnover. The company is now part of ArcelorMittal.[1]

CEO Lakshmi Mittal's family owned 88% of the company. Mittal Steel was based in Rotterdam but, managed fromLondon by Mittal and his son Aditya. It was 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. On 25 June 2006, Mittal Steel decided to merge with Arcelor, with the new company to be

called Arcelor Mittal. The merger has been successfully approved by shareholders and

directors of Arcelor making L.N. Mittal the largest steel maker in the world.Contents

 [hide]

1   History

2   Bids and acquisitions

3   See also

4   References

[edit]History

In 1989, the company acquired Iron & Steel Company of Trinidad & Tobago. In 1992, the company acquired Sibalsa. In 1994, the company acquired Sidbec-Dosco. In 1995, the

company Acquisitions of Hamburger Stahlwerke, which formed Ispat International Ltd. and Ispat Shipping, and Karmet. In 1997, the company Acquisitions of Walzdraht Hochfeld

GmbH and Stahlwerk Ruhrort. In 1997, the company Ispat International NV goes public. In 1998, the company acquired Inland Steel Company. In 1999, the company acquired

Unimétal. In 2001, the company Acquisitions of ALFASID and Sidex. In 2002, the company Business assistance agreement signed with Iscor. In 2003, the company acquired

Nowa Huta.

In 2004, the company Acquisitions of Polskie Huty Stali, BH Steel, Macedonian facilities from Balkan Steel. Creation of Mittal Steel. In 2005, the company HireDeloitte as the

primary auditors for the company. In 2005, the company acquired International Steel Group. In 2005, the company acquired Kryvorizhstal. In 2005, the company Investment of $9

billion in Jharkhand, India announced. In 2006, the company Merger with Arcelor announced and completed after much controversy. In 2006, the company Investment for 12

million tonnes capacity steel plant announced in Orissa, India. In 2009, the company Acquire 34% stake in Uttam Galva.

[edit]Bids and acquisitions

In October 2005 Mittal Steel acquired Ukrainian steel manufacturer Kryvorizhstal for $4.8 billion in an auction after a controversial earlier sale for a much lower price to a

consortium including the son-in-law of ex-President Leonid Kuchma was cancelled by the incoming government of President Viktor Yushchenko.

In 2005 Lakshmi Mittal flew into Jharkhand, India to announce a $9 billion investment to build a greenfield steel plant with a 12 million tonnes per annum production capacity.

On 27 January 2006 it announced a $23.3 billion (€18.6 billion, £12.7 billion) bid for Arcelor. On 19 May 2006 Mittal increased its offer for Arcelor by 38.7% to $32.4bn, or $47.34

per share (€25.8bn, €37.74 per share). On 25 June 2006 Arcelor, in a board meeting announced that it has accepted a further sweetened offer ($50.68 or €40.4 per share) and

the new company would now be called ArcelorMittal, thus successfully ending one of the most controversial and publicised takeover bids in modern corporate history.

ArcelorMittal is now by far the largest steelmaker in the world by turnover as well as volume, controlling 10% of the total world steel output. [1]

[edit]

Arcelor

From Wikipedia, the free encyclopedia

Arcelor S.A.

Type subsidiary

Industry Steel

Founded Arbed in 1911

Aceralia in 1902

Usinor in 1948

Arcelor on 18 February 2002

Headquarters  Luxembourg City,Luxembourg

Key people  Lakshmi Mittal, CEO of the Arcelor Mittal group

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. The company was created by a merger of the former companies Aceralia (Spain), Usinor (France) and Arbed (Luxembourg) in 2002.

Arcelor is now part of Arcelor Mittal.

Contents

 [hide]

1   Business

2   Merger with Mittal Steel

o 2.1   Reaction to the takeover

3   Products

o 3.1   Flat steel products

4   See also

5   References

6   External links

[edit]Business

Employing 310,000 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 is the world's largest steel manufacturer in terms of turnover. It produces long

steel products, flat steel products and inox-steel. In January 2006 Arcelor announced the acquisition of Dofasco, Canada's largest steel producer with an annual output of 4.4

million tons. After an intense bidding war against the German ThyssenKrupp, Arcelor had finally bid 5.6 billion Canadian dollars. The high bid proves the importance of Arcelor's

improving presence in the North American market.

[edit]Merger with Mittal Steel

Wikinews has

related

news:Arcelor

declares

merger with

Mittal Steel

The company was the target of a takeover bid by its rival Mittal Steel on 2006-01-27.[1] However, the bid resulted in substantial increase in Arcelor's share value. Two members of

the board of Arcelor, Guillermo Ulacia and Jacques Chabanier also resigned suddenly.[2] On May 26, 2006 Arcelor announced its intention to merge with Severstal. Since then

several economists, media and shareholders have questioned the intentions of Arcelor in announcing its merger with Severstal due to a perceived opacity in the transaction. But

on 25 June 2006, the Arcelor board decided to go ahead with the merger with Mittal Steel and scrapped plans for Severstal merger. The new company is now called "Arcelor

Mittal". Arcelor also paid Severstal €140 million as a "fine" for the fall-out of their failed talks. Lakshmi Mittal (owner of Mittal Steel) became the president and Joseph Kinsch

(formerly Arcelor chairman) was appointed chairman of the new company till his retirement.[3][4] Arcelor's merger with Mittal created the worldwide leader in the steel industry,

increasing its bargaining power with suppliers and consumers. Mittal steel has agreed to pay 40.37 euros a share to Arcelor, almost double the amount offered by Mittal last time.

[edit]Reaction to the takeover

Arcelor's directors strongly opposed the takeover, as did the governments of France, Luxembourg and Spain. The Belgian government, on the other hand, declared its stance as

neutral and invited both parties to deliver a business plan with the future investments in research in the Belgian steel plants. 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. Indian commerce minister Kamal Nath warned that any

attempt by France to block the deal would lead to a trade war between India and France.[5]

On June 20, the above claim by economists was confirmed when Severstal increased its valuation of Arcelor. Management of Arcelor had in fact undervalued the company itself.

The capability of management which had openly supported the previous valuation of Arcelor came into question. Further the combined markets of France, Belgium, Luxembourg

and Spain chided Arcelor management and suspended trading of its stock.

On June 26, the Board of Directors recommended the approval of the improved Mittal offer (49% improvement compared to the initial offer with 108% improvement of the cash

component), proposed the creation of Arcelor-Mittal with industrial and corporate governance model based on Arcelor and scheduled a corporate meeting for June 30 to vote on

this.

[edit]Products

The products of Arcelor are divided into three groups: Flat steel products, long steel products and stainless steel.

[edit]Flat steel products

The main production sites of flat steel products are Ghent-Zelzate, Dunkirk, Avilés, Gijón, Fos-sur-Mer, Piombino, Liège, Florange, Bremen, Eisenhüttenstadt and recently São

Francisco do Sul in Brazil.

[edit]

ARCELOR- MITTAL CONTROVERSY              

One of the most controversial business deals ever- the acquisition of Arcelor Steel by Mittal Steel led to the creation of Arcelor-Mittal, the largest steel maker in the world.

1. Background (before the deal)

Mittal Steel- the largest producer of steel in terms of volume. Despite the fact that Mittal steel is based in Netherlands, it is perceived that the company is non-European because its CEO Lakshmi Mittal is Indian.Arcelor- Headquartered in Luxembourg, the merger of three steel companies- Aceralia, Arbed and Usinor led to the creation of Arcelor. In 2005, Arcelor had revenues of 32 billion Euros.

2. The original bid

In January 2006, Mittal Steel launched a $22.7 billion offer to Arcelor’s shareholders. The deal was split between Mittal Shares (75 percent) and cash (25 percent). Under the offer, Arcelor shareholders would have received 4 Mittal Steel shares and 35 euros for every 5 Arcelor shares they held. (Ultimately the power to buy or sell the shares rests with the shareholder and the company management can at best advice its shareholders whether to accept or reject the bid)

3. Consolidation in the steel industry- inevitable:

The steel industry is highly fragmented, the top 5 manufacturers in the steel industry account for less than 25 percent of the market (to put that in perspective, the corresponding figure for the automotive industry is 73 percent). LN Mittal believes that the consolidation will end with three of four major companies dominating the industry around 2010.

Bigger steel manufacturers have better bargaining powers against customers (such as as auto manufacturers) and against suppliers (iron ore).

Consolidation helps in comapnies improving their sourcing of raw materials; access to more markets, better utilization, more flexibility in production scheduling and better efficiency.

4. The Controversy

Arcelor Management: The management believed that Arcelor itself would have been doing the acquisitions and not the other way around. The management was extremely hostile to Mittal Steel’s bid from the beginning. Arcelor repeatedly played the patriotic card in order for shareholders to reject the bid. The CEO of Arcelor dismissed Mittal Steel as a “company of Indians” and unworthy of taking over a European company. (all this despite the fact that most industry analysts and investment banks pointing out that the deal was in Arcelor‘s best interests)

European Governments:

The French government (despite not being a shareholder) was against the deal because of worries over its 28000 Arcelor employees. Despite repeated assurances from Mittal that the deal would not lead to layoffs the government of France was never convinced. The government of Luxembourg (a stakeholder) was against the deal as well for a variety of reasons. The European Union approved of the Mittal-Arcelor deal.

5. Moves by Arcelor to counter the bid by Mittal:

Declaration of Dividend: On February 16, Arcelor declared a dividend of 1.2 Euros, which was 85 percent higher than the previous dividend in 2004. This was seen as an attempt by the company to convince shareholders that the situation under the current management was extremely positive. Many analysts accused the company of “creative” accounting.

<!--[if !supportEmptyParas]--> <!--[endif]-->

The Russian Angle: In an attempt to thwart the offer from Mittal Steel, Arcelor released a 13 billion Euro merger plan with Severstal, a Russian company. This merger would have made the new Severstal-Arcelor entity too big for Mittal Steel to buy. Despite the merger plan being fraught with loopholes, the Arcelor management tried to convince shareholders that this was the best deal for them. The shareholders however rejected the merger with not one shareholder voting in favour of the merger.

6. Role of Guy Dolle (then CEO of Arcelor)

Mr. Dolle’s reaction to the Mittal bid led to widespread criticism of his actions. Analysts believe that Guy Dolle had issues with the personality of LN Mittal.

As the controversy panned out, Dolle raised several issues including the management of Mittal (Aditya Mittal, son of LN Mittal is on the board). Dolle also raised a number of issues about the safety record of Mittal and also repeatedly pointed out that Arcelor was absolute key to Europe’s economic health.

Guy Dolle is not a part of the new Arcelor-Mittal organization.

7)The stance of the Indian Government

Most Indians were of the opinion that the deal was not getting pushed through because of Lakshmi Mittal’s nationality.

The Indian government raised the issue at several forums especially through commerce minister Kamal Nath. It was also alleged that India had threatened

not to ratify a taxation accord with Luxembourg due to the latter’s opposition to the deal.

The irony is that LN Mittal himself felt that there was no case of “racism” here as Mittal Steel was a European company and NOT an Indian one.

8. End Result

The deal was finally clinched when the shareholders of Arcelor agreed to Mittal Steel’s offer ending the transaction that had dragged on for months.

Mittal had to however considerably sweeten the initial offer. Under severe pressure to counteract the Arcelor- Severstal merger, Mittal had to raise its valuation of Arcelor to $32.9 billion. The Mittal family holds 43 percent of the combined group. The combined company holds 10 percent of the global market for steel. The consolidation phase is well and truly underway .

External Links:

Timeline of the Mittal Arcelor Deal- Financial Times Lakshmi Nivas Mittal (Man of Steel)- MSNBC

Please respect FT.com's ts&cs and copyright policy which allow you to: share links; copy content for personal use; & redistribute limited extracts. Email ftsales.support@ft.com to buy additional rights or use this link to reference the article - http://www.ft.com/cms/s/2c8e7d6c-904d-11db-a4b9-0000779e2340.html#ixzz1HIHaQwII

Steel struggle: Mittal Steel/ArcelorPublished: May 22 2006 11:58 | Last updated: May 22 2006 11:58

Jan 27, 2006: Mittal Steel unveils €18.6bn cash and share offer for Arcelor

Jan 29: Arcelor directors reject Mittal’s offer as “150 per cent hostile”, saying the companies “do not share same vision, business model and values”

Jan 31: Jean-Claude Juncker, prime minister of Luxembourg, which holds 5.6 per cent of Arcelor, vows to use “all necessary means” to fend off Mittal’s unsolicited offer

Feb 16: Arcelor raises 2005 dividend by 85 per cent.

Apr 4: Arcelor says it will distribute €5bn to shareholders. Raises 2005 dividend to €1.85

Apr 28: Arcelor chairman says supervisory board would think again if Mittal made a cash bid

May 9: Mittal says it is willing to revise terms if Arcelor board recommends its bid

May 12: Arcelor says it will implement €5bn share buy-back

May 17: Mittal launches offer after regulators approve terms of the deal

May 18: Mittal raises offer by 34 per cent to €25.8bn with a 57 per cent increase in cash component. New deal would relinquish Mittal family control of group.

May 25: Arcelor agrees to join forces with Russian steelmaker, Severstal

May 30: Leading Arcelor shareholders speak out against proposed Severstal merger

May 31: More than a third of Arcelor investors sign a letter demanding the right to vote on a deal

June 7: Arcelor agrees to meet representatives from Mittal

June 11: Arcelor formally rejects Mittal’s €25.8bn bid and reiterates plans to press ahead with Severstal merger, but leaves the door open for an increased offer from Mittal and gives shareholders the chance to vote

June 18: Arcelor cancels shareholder vote on Severstal

June 20: Spanish investor forces Severstal rethink after calling for management changes at Arcelor

June 21: Severstal changes terms of its proposed merger with Arcelor to counter shareholder fears

June 25: Arcelor recommends upgraded €26.9bn Mittal offer after intensive talks

Lakshmi Mittal

From Wikipedia, the free encyclopedia

Lakshmi Mittal

Born 15 June 1950 (age 60)

Sadulpur, Rajasthan, India

Residence London, United Kingdom

Ethnicity Indian

Citizenship India

Alma mater St. Xavier's College, Calcutta [1]

Occupation Chairman & CEO ArcelorMittal

Owner of Karrick Limited[2]

Net worth US$31.1 billion (2011)[3]

Religion Hinduism

Children Vanisha Mittal

Aditya Mittal

Lakshmi Narayan Mittal (Hindi: लक्ष्मी� मिमीत्तल; born 15 June 1950)[4] is an Indian steel magnate. He is the chairmanand chief executive officer of ArcelorMittal, the world’s largest

steelmaking company.

Mittal is the second richest man in Europe [5]  and is presently the sixth richest in the world with a personal wealth ofUS$31.1 billion or £23.8 billion.[3] He is the 44th most powerful

person of the 68 most powerful people in the world. One out of 5 cars in the world is made up of the steel materials of his steel empire. His daughter Vanisha Mittal's marriage

was the most expensive in the recorded history of the world.[6][7]

He is an independent director of Goldman Sachs, member of the Board of Directors of European Aeronautic Defence and Space Company,[8] World Steel Association, Foreign

Investment Council in Kazakhstan, the International Investment Council in South Africa, the Investors' Council to the Cabinet of Ministers of Ukraine, the World Economic Forum’s

International Business Council, the World Steel Association's Executive Committee, the Presidential International Advisory Board of Mozambique and the International Iron and

Steel Institute’s Executive Committee.[9]

He also presently serves as a board council member of the Prime Minister of India's Global Advisory Council of Overseas Indians.[10] and members in the Advisory Board of

the Kellogg School of Management, Executive Board atIndian School of Business and St. Xavier's College, Calcutta Alumni Association, London Chapter.

In 2006, Financial Times named him "Person of the Year". In 2007, Time magazine included him in their "100 most influential persons in the world".

Contents

 [hide]

1   Early life

2   London 2012 Olympics and Paralympic Games

3   Philanthropy

4   Criticism and allegations

o 4.1   PHS

o 4.2   Slave-labour allegations and abhorrent safety records

o 4.3   The Mittal Affair: "Cash for Influence"

o 4.4   Queens Park Rangers We're Top of the league!

o 4.5   Environmental damage

5   Personal life

6   Awards and Honours

7   Bibliography

8   See also

9   References

10   External links

[edit]Early life

Lakshmi Mittal was born into a Marwari business family in Churu district of Rajasthan, India. His family moved from Sadulpur, Rajasthan to Calcutta in West Bengal. He

graduated from St. Xavier's College, Calcutta where he graduated with a Bachelor of Commerce degree in business and accounting with first class. He has two siblings

(brothers) named Pramod Mittal and Vinod Mittal. His father, Mohan Lal Mittal, ran a steel business, Nippon Denro Ispat. Until the 1990s, the family's main assets in India were a

cold-rolling mill for sheet steels in Nagpur and an alloy steels plant near Pune. Today, the family business, including a large integrated steel plant near Mumbai, is run by

Lakshmi's brothers, Pramod and Vinod, but Lakshmi has no connection with it.[11]

Mittal started his career working in the family's steel making business in India, and in 1976, when the family founded its own steel business, he set out to establish its international

division, beginning with the buying of a run-down plant in Indonesia. Shortly afterwards he married Usha, the daughter of a well-to-do moneylender. In 1976, due to differences

with his father, mother and brothers,branched out on his the LNM Group, and he has been responsible for the development of its businesses ever since. Mittal Steel is a global

steel producer with operations in 14 countries.

Mittal pioneered the development of integrated mini-mills and the use of direct reduced iron or "DRI" as a scrap substitute for steelmaking and led the consolidation process of the

global steel industry. Mittal Steel is the largest steelmaker in the world, with shipments of 42.1 million tons of steel and profits of over $22 billion in 2004.

Mittal was awarded Fortune magazine's "European Businessman of the Year 2004" and also "Steelmaker of the Year" in 1996 by New Steel, and the "Willy Korf Steel Vision

Award" in 1998, for outstanding vision, entrepreneurship, leadership and success in global steel development from Metal Market and PaineWeber’s World Steel Dynamics. In

2002, he was involved in a political scandal with British Prime Minister Tony Blair, when a donation he made to the Labour party led to Blair's intervention in a business deal

favoring Mittal. It was announced later that he donated £2 million to the Labour Party.Also conducting charitable activity at his home town.

[edit]London 2012 Olympics and Paralympic Games

ArcelorMittal, led by Chairman and CEO Lakshmi Mittal, will fund £16 million of the £19.1 million project, with the outstanding £3.1 million provided by the London Development

Agency. As such, the sculpture not only represents a significant cultural investment - the largest single artwork ever commissioned for any Olympiad - but will also make a

significant financial contribution to the long-term regeneration of East London.[12]

The ArcelorMittal Orbit, the largest artistic commission in the world, will harness state-of-the-art engineering and architectural techniques. Constructed with steel provided by

ArcelorMittal, the sculpture will consist of a continuous looping lattice of tubular steel and offer unparalleled view of the entire Olympic Park and London's skyline from a special

viewing platform.[12]

[edit]Philanthropy

After witnessing India win only one medal, bronze, in the 2000 Summer Olympics, and one medal, silver, at the 2004 Summer Olympics, Mittal decided to set upMittal Champions

Trust with US$9 million to support 10 Indian athletes with world-beating potential.[13] In 2008, Mittal awarded Abhinav Bindra with Rs. 1.5 Crore (Rs. 15 million), for getting India its

first individual Olympic gold medal in shooting.

For Comic Relief 2007, he matched the money raised (~£1 million) on the celebrity special BBC programme, The Apprentice.

ArcelorMittal also has a very active CSR program under which it sets out its path to produce Safe Sustainable Steel. The company also operates the ArcelorMittal Foundation,

which provides support to many different community projects around the world in the countries where ArcelorMittal operates.

His institute "The Lakshmi Niwas Mittal Institute of Information Technology, Jaipur" is producing quality engineers since 2003.

[edit]Criticism and allegations

[edit]PHS

Lakshmi Mittal successfully employed Marek Dochnal's consultancy to influence Polish officials in the privatization of PHS steel group, which was Poland's largest. Dochnal was

later arrested for bribing Polish officials on behalf of Russian agents in a separate affair.[14]

In 2007, Polish government said it wants to renegotiate the 2004 sale to Arcelor Mittal.[15]

[edit]Slave-labour allegations and abhorrent safety records

Employees of Mittal have accused him of "slave labour" conditions after multiple fatalities in his mines.[16] During December 2004, twenty-three miners died in explosions in his

mines in Kazakhstan caused by faulty gas detectors.

Mr. Mittal has been accused of running a series of coal mines in Kazakhstan with abhorrent safety records. Between 2004 and 2007, the lax standards were responsible for the

deaths of 91 coalminers and the subject of a criminal investigation. Witnesses to a 2006 explosion, which claimed the lives of 41 people, maintain that, despite the plumes of

flammable gas, managers at the mines pushed the employees to work so that they could meet their production as well as other targets. One employee even told the Times, "The

pressures local managers put us under to meet targets so that they can collect their bonuses are more and more stressful. We are being exploited like animals." Former miner

turned trade unionist Pavel Shumkin even claimed, "The miners all agree: compared with life now under Mittal, for them everything was better in Soviet times."[17]

[edit]The Mittal Affair: "Cash for Influence"

Main article: Mittal Affair

Controversy erupted in 2002 as Plaid MP Adam Price exposed the link between UK prime minister Tony Blair and Mittal in the Mittal Affair, also known as 'Garbagegate' or Cash

for Influence.[18][19][20] Mittal's LNM steel company, registered in the Dutch Antilles and maintaining less than 1% of its 100,000 plus workforce in the UK, sought Blair's aid in its bid

to purchase Romania's state steel industry.[20] The letter from Blair to the Romanian government, a copy of which Price was able to obtain, hinted that the privatisation of the firm

and sale to Mittal might help smooth the way for Romania's entry into the European Union.[18]

The letter had a passage in it removed just prior to Blair's signing of it, describing Mittal as "a friend." On facebook.[21]

[edit]Queens Park Rangers We're Top of the league!

Recently, Mittal had emerged as a leading contender to buy and sell Barclays Premiership clubs Wigan and Everton. However on 20 December 2007 it was announced that the

Mittal family had purchased a 20 per cent shareholding in Queens Park Rangers football club joining Flavio Briatore and Mittal's friend Bernie Ecclestone.[22] As part of the

investment Mittal's son-in-law, Amit Bhatia, took a place on the board of directors. The combined investment in the struggling club sparked suggestions that Mittal might be

looking to join the growing ranks of wealthy individuals investing heavily in English football and emulating other similar benefactors such as Roman Abramovich.[23]

On 19 February 2010, Flavio Briatore resigned as QPR chairman, and sold further shares in the club to Mittal, making Mittal the single largest shareholder.[24]

[edit]Environmental damage

Mittal purchased the Irish Steel plant based in Cork from the government for a nominal fee of £1. Three years later in 2001, it was closed, leaving 400 people redundant.

Subsequent environmental issues at the site have been a cause for criticism. The Government tried to sue in the High Court to have him pay for the clean-up of Cork Harbour but

failed. The clean up was expected to cost €70m.[25]

[edit]Personal life

He presently lives in Kensington, London. His residence at 18-19 Kensington Palace Gardens which was purchased from Formula One boss Bernie Ecclestone in 2004 for £57

million (US$128 million), making it the world's most expensive house at the time.[26] Mittal's house in Kensington, London is decorated with marble taken from the

same quarry that supplied the Taj Mahal. The extravagant show of wealth has been referred to as the "Taj Mittal".[27] It has 12 bedrooms, an indoor pool, Turkish baths and

parking for 20 cars.[28]

Mittal bought No.6 Palace Greens, Kensington Gardens, formerly owned by financier Noam Gottesman, at £117 million for his son Aditya Mittal who is married toMegha

Mittal owner and director of the Board of the German fashion luxury brand Escada.

Mittal bought No.9a Palace Greens, Kensington Gardens, formerly the Filipino embassy, at £70 million in 2008 for his daughter Vanisha Mittal Bhatia who is married to Amit

Bhatia a businessman and a philanthropist.

Mittal owns three prime properties collectively worth £500 million on the "Billionaire's Row" at Kensington Palace Gardens. [29]

Mittal also owns a house called Summer Palace at 46B, The Bishops Avenue, which is dubbed as "Millionares Row" and is reportedly for sale at £40 million.

In 2005, he also bought a colonial bungalow for $7.5 million at No.22, Aurangzeb Road in New Delhi, India, the most exclusive street in the city occupied by embassies and

millionaires, and rebuilt it as a house.

In January 2011 Lakshmi Mittal bought a luxury home in Scotland. Mittal has knocked down a £4 million property to build his new home, valued at around £15 million, making it

Scotland’s most expensive home. The Mittal mansion is coming up in one of the most elite neighbourhoods, right near the Gleneagles golf course in Perthshire County. This

luxury villa has six bedrooms and two kitchens. The wallpaper and furniture are from Ralph Lauren’s home collection. The wooden flooring and tiles have been flown in from

Germany and a super luxe bathroom is estimated to be worth £80,000.

Mittal is now planning to build a "Zero Carbon" Footprint estate in Surrey a 340 acre estate also called Alderbrook Park which was built as a country estate during the 19th

century but was part-demolished in the 1950s and replaced with a less-attractive home. He purchased the estate for £5.25 million ands is planning to spend £25 million on it to

make it 100 per cent self-sufficient and eco-friendly. The unique modern design will not only ensure the house is zero-carbon, but will make the entire 340-acre estate carbon

negative. The house will be built on a stone plinth, which will provide various terraces on which to enjoy the cocktail hour. It will have at least 10 bedrooms, outdoor and indoor

swimming pools, a fitness centre, an under-ground art gallery, tennis courts, sculpture garden, an arboretum and croquet lawn.

[edit]Awards and Honours

Year of Award or Honor Name of Award or Honor Awarding Organization

2010 "Dostyk" 1 Republic of Kazakhstan.

2008 Forbes Lifetime Achievement Award Forbes.

2007 Padma Vibhushan President of India.

2007 Grand Cross of Civil Merit Government of Spain.

2007 Dwight D. Eisenhower Global Leadership Award Business Council for International Understanding.

2007 Fellowship King's College London.

2004 European Businessman of the Year Forbes.

2004 Entrepreneur of the Year Wall Street Journal.

2004 8th honorary Willy Korf Steel Vision AwardAmerican Metal Market and World Steel Dynamics.

1996 Steel Maker of the Year New Steel.

2007: He was the commencement speaker of class of 2007's MBA commencement at the Wharton School of the University of Pennsylvania.[30]

[edit]

Aditya Mittal

From Wikipedia, the free encyclopedia

Aditya Mittal is a CFO, Responsible for Flat Americas, Mergers and Acquisitions (M&A), Investor Relations, Strategy and Communications of the world's largest steel

firm ArcelorMittal, which is controlled by his father Lakshmi Mittal, who was ranked the fifth richest person in the world by Forbes in 2010.

He has a Bachelor's Degree in Economics with concentrations in Strategic Management and Corporate Finance from the Wharton School of the University of Pennsylvania in the

United States, from which he graduated magna cum laude in 1996. He worked for a short time in the mergers and acquisitions department at investment bank Credit Suisse First

Boston. He joined the family business in 1997 and was appointed Head of Mergers and Acquisitions in 1999, and has been involved in several purchases since then as Mittal

Steel has played a major role in the consolidation of the global steel industry. He lives in London. He led Mittal Steel's offer for Arcelor that led to its acquisition and merger with

Mittal Steel in 2006. The two companies were merged in 2006 and the new merged company is called ArcelorMittal.

Aditya Mittal is married to Megha Mittal, owner of German fashion company Escada. He has one sister, Vanisha, who is married to Amit Bhatia and is a board member of

ArcelorMittal.[1]

In 2009, he was ranked 4th in the '40 under 40' [2] list of Fortune magazine. He is a member of the World

Economic Forum's Young Global Leaders Forum, the Young President's Organization, a

Board Member at the Wharton School, a Board Member at Bennett, Coleman & Co., a

Board Member at PPR and a member of Citigroup's International Advisory Board.Contents

 [hide]

1   Charity

2   References

3   Further reading

4   External links

[edit]Charity

He is involved with various charitable organisations, including the NSPCC in the United Kingdom.

In 2008, Aditya and Megha Mittal made a donation of £15m to the Great Ormond Street Hospital in London, [3] the largest private contribution the hospital had ever received. The

donation was used to help fund their new facility, the Mittal Children’s Medical Centre.[4]

[edit]