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Mittal Steel/Arcelor – A merger of equals page
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This case presents an unusual process of consolidation where the leader of one industry acquires
its nearest competitor. At January 27th, 2006 Mittal Steel initiated the most remarkably acquisition
in steel industry which would create a giant steelmaker. This industry saw in the past fierce bidding wars between players, and Dofasco acquisition by Arcelor after a dispute with ThyssenKrupp and Kryvorizhstal takeover by Mittal following a fight with Arcelor are examples of that, but this particular merger, given the players involved, caused deep changes in this industry.
Mittal’s offer was initially considered by Arcelor as “150% hostile” and ended up at June 25th 2006
as a recommended offer by the same persons that considered it unpleasant some months before.
Hence, is interesting to realize which factors contribute to this huge change in Arcelor judgement
about Mittal’s offer.
We assisted many interesting attacking and defensive measures of both parties which changed the odds of success for each side several times.
Therefore the purpose of this work project is to dissect each movement of both companies, to
analyse its consequences in the final outcome of this process and to understand the rationale
behind some measures taken by the players involved. It is also intended to proportionate to the
reader a clear evolution of this process in a timeline basis, describing the facts in the order they
were happening.
This projects approaches themes such as active and defensive measures in mergers and
acquisitions (M&A), how the financial structure can trigger M&A, industry analysis to understand
M&A trends, shareholders structure and corporate governance issues. At the final, general
knowledge about these issues is clarified and developed.
Descrição
A Work Project, presented as part of the requirements for the Award of a Masters Degree in Management from the Nova School of Business and Economics