Mittal Steel Executive Finds Support for a Takeover Bid

The owner of the largest steel company in the world is meeting some resistance after making a $22.7 billion bid for its French rival, Arcelor. The proposed takeover by Mittal Steel, owned by an Indian national, Lakshmi N. Mittal, has sparked an intense concern in Europe. Mittal denies suggestions that a clash of business cultures could result, emphasizing the company’s international character and its identity as “one of the world’s most profitable steel multinationals.” The move follows increasing consolidation in the industry – a much touted global trend that experts believe will help manage output and price as well as protect companies over the long term from competition in “low-cost centers like China.” Yet, French President Jacques Chirac and other European politicians, along with labor unions, do worry about the fate of employees, fearing that up to 30,000 jobs may be lost in France alone. India’s commerce minister has responded forcibly, hinting that any EU move to block Mittal Steel could derail WTO negotiations. He maintains that the merits of the deal, not a businessman’s nationality, should be the deciding factor, and charged that the EU is simply suffering from the “pangs of globalization.” – YaleGlobal