Word: arcelor
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Dollé, 63, is chief executive of Luxembourg-based Arcelor, Europe's biggest steel company, measured by revenue, which was formed in 2002 out of what was left of the French, Belgian, Luxembourgian and Spanish steel industries. Mittal, 55, is the Indian-born chairman of the world's biggest producer of steel, Mittal Steel, which he built up over the past decade with a slew of acquisitions, in the process making a fortune for himself estimated at $25 billion. The two men have known each other for years and, as board members of the steelmakers' international trade group, meet regularly...
...less than two weeks later - Mittal called Dollé on his mobile phone at Frankfurt airport while he was checking in for a flight to Toronto. The message: Rotterdam-based Mittal Steel would be announcing the following day a formal $22.6 billion takeover bid for Arcelor, one of the largest hostile bids in European history...
Mittal's bid could still be derailed. Financial markets bubbled over with rumors that Arcelor was looking for a rescuer, possibly a Japanese firm who would put in a higher offer, although no such "white knight" had emerged by the end of the week. Mittal also needs to convince investors that his bid, which consists mainly of Mittal Steel stock with some cash, is good for them. Mittal Steel has what many see as a financial weak point: its corporate governance structure, which locks in Mittal family control. Lakshmi's son Aditya, 29, is president and ceo of the company...
...Europe to paint him as a villain. He spent most of the week shuttling in his private jet from European capital to European capital, including three trips to Paris, to explain his motives and promise he wouldn't cut European jobs. Governments have limited formal means to stop the Arcelor deal, as 85% of the company is traded freely on the stock market. Nonetheless, they and labor unions can make life hard for Mittal, who still needs to get E.U. antitrust clearance for the deal. The French government has used its political muscle to block takeovers in the past, including...
Antitrust clearance may take several months, but early indications are that it may not pose a huge problem. The combined company would be three times the size of its nearest competitors, with a 10% share of the world steel market, but Mittal and Arcelor don't have many territorial or product overlaps that could cause problems with regulators. Hermann Reith, analyst with BHF-Bank in Frankfurt, says he reckons the chances of the deal going through are now more than 50%. "We will look at this issue, as always, very carefully on competition grounds only. The regulation gives...