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Case Title:

Checkmate Mittal Steel: What went Wrong (part-B)

Publication Year : 2006

Authors: Abhijit Sinha

Industry: Minerals, Metals and Mining


Case Code: GRS0136K

Teaching Note: Not Available

Structured Assignment: Not Available

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On 26Th Jan 2006, Laxmi Niwas Mittal, the chairman and CEO of Mittal Steel, globally the largest steel maker made a bid for Arcelor SA, globally the second largest steel maker. Mittal’s bid for the European crown jewel made entire Europe frenzy. Spain, France, Luxembourg and Belgium government strongly opposed the deal. Arcelor choose to merge with Severstal, the largest steel maker of Russia. The case discusses what went wrong with Mittal steel, how Severstal plan to leverage the merger with Arcelor and the strategic rationale behind it.

Pedagogical Objectives:

  • To discuss the bidding process involved in an acquisition
  • To discuss the trends, patterns of global steel industry and consolidation as a major strategy in fragmented steel industry globally
  • To discuss acquisition process of Arcelor, the largest steel company of Europe and second largest globally by Mittal Steel, potential synergies and problems associated with the acquisition
  • To discuss how acquisition as a growth strategy help companies to consolidate in fragmented steel industry
  • To discuss the key factors which make an acquisition a successful one
  • To discuss in details about the problems of acquisition and how the maximum leverage can be gained
  • To discuss, the bidding process and thereafter funding of an acquisition
  • To discuss the concept of ‘white knight’, ‘black knight’ and ‘poison pill’.

Keywords : Mittal Steel; Arcelor; Severstal; NAFTA (North American free Trade Agreement); ASEAN (Association of Southeast Asian Nations); Nippon Steel; Electronic arc furnace (EAF); Flat product; Long product; Basic oxide furnace; Technology leadership; Iron ore; Growth Strategies Case Study; Xenophobia; White knight; Poison pill

Contents : 
Mittal Steel: Expanding Globally
Arcelor S.A.: The Second Largest
Severstal: The Russian Steel Giant
Consolidation: A Major Strategy In The Global Steel Industry
Mittal’s Bid And Synergy From Arcelor- Mittal Steel
Severstal: Steal The Deal
Arcelor-Severstal Merger Synergy: Outmanoeuvring Mittal Steel
Arcelor – Severstal: Marriage Made In Hell?

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