Arcelor

Business

Once employing 310,000 employees in over 60 countries, it was 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 €40 billion, Arcelor was, by 2006, one of the world's largest steel manufacturer in terms of turnover.

It produced 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.

Merger with Mittal Steel

The company was the target of a hostile takeover bid by its rival Mittal Steel on 27 January 2006. 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.{{cite web |archive-url=https://web.archive.org/web/20060211005947/http://www.arcelor.com/index.php?lang=en&page=49&tb0=127 |url-status=dead |archive-date=2006-02-11 |access-date=2006-02-07

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 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.{{cite web |archive-url=https://web.archive.org/web/20060219121325/http://www.hindustantimes.com/news/181_1615241,00020008.htm |url-status=dead |archive-date=February 19, 2006

On 20 June, 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 26 June, 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 30 June to vote on this.

Products

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

Flat steel products

The main production sites of flat steel products are Ghent, Dunkirk, Avilés, Gijón, Fos-sur-Mer, Piombino, Liège, Florange, Bremen, Eisenhüttenstadt and recently São Francisco do Sul in Brazil.

References

References

1. link. (February 2, 2006)
2. [http://www.iht.com/articles/2006/06/25/business/steel.php Arcelor agrees to Mittal merger] {{Webarchive. link. (2006-09-01 on International Herald Tribune)
3. [http://inhome.rediff.com/money/2006/jun/25mittal.htm Arcelor, Mittal decide to merge: Reports] {{Webarchive. link. (2023-01-07 on Rediff.com)
4. Kanter, James. (2006-06-25). "Arcelor agrees to Mittal takeover". The New York Times.