Mittal-Arcelor Merger: Our View...

The inevitable has happened! The worlds second largest make maker, Arcelor has finally bent to a US$ 32 bn takeover bid by its large competitor, and worlds largest steel maker, Mittal Steel. The combine bequeath create a world-wide steel giant that will be almost 3 generation bigger than the nearest rival, Nippon Steel of Japan. The agreement has been arrived at afterward almost a five-month battle, which has involved, apart from Mittal Steel and Arcelor, several(prenominal) European governments. Parameters building block Mittal Steel Arcelor Capacity MT 63.0 46.7 Revenues US$ bn 28.1 39.1 EBIDTA margins % 20.6 17.3 PAT margins % 12.0 11.8 The unite entity will be called Arcelor-Mittal and will turn in a 10% share of the global steel skill of 1,132 m tonnes (MT) per year. As reported, while the Mittal family will throw away a 43.4% stake in the new entity, Arcelor share urinateers will own 50.5% stake. Lakshmi Mittal and Joseph Kinsch (Arcelors on-going Chairman ) will jointly head the new corporation, which will study combine revenues of around US$ 69 bn.

As indicated in a Mittal Steel presentation, the combine, with a geographical footprint in 27 countries (with 61 manufacturing locations), will have several strategic advantages corresponding: Leadership position in high-end segments in northwards the States, with reinforced R&D capabilities; Operations in high-growth economies of Asia and southern America with low-cost profitable assets and local operations expertness in numerous emerging markets; Access to raw materials and upstream consolidati on Well-balanced portfolio exposed ! to the whole spectrum of steel products So, what are the implications for Indian steelmakers? Not much, really! While the Arcelor-Mittal combine will hold around 10% of the global steel manufacturing capacity, it is still not sufficient to create any monopolistic kind of a situation in the steel markets. The fact that the largest player in the market (Arcelor-Mittal) will only have a 10% share...If you want to get a full essay, order it on our website: OrderCustomPaper.com

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