Arcelor Deal With Mittal Creates New Steel Giant

Despite vigorous protest, a global steel giant emerges, now that the controversial merger between India’s Mittal Steel and Luxembourg-based Arcelor is signed and sealed. Arcelor executives and even European government officials rejected the original Mittal offer with stinging insults that revealed the anxieties behind Europe’s protectionist trend. Difficult negotiations followed, leading to a bid almost twice as much as the original along with major concessions from Lakshmi Mittal, the Indian head of Mittal Steel. Takeover success after such hostility signals that the reach of Chinese and Indian companies into Western economies is inevitable. Analysts expect more firms from developing nations to follow the precedent, enduring insults while seeking expansion into European and US markets. The firm, known as Arcelor-Mittal, will control about 10 percent of the global steel market. In the end, the deal represents a victory for shareholders’ power in corporate governance – and the logic of global capitalism over territorialism and xenophobia. – YaleGlobal