Protecting favorite industries only postpones inevitable changes that can also be helpful
The battle over Arcelor, Europe’s biggest steel company, was about more than a merger. The success of Mittal’s bid posed a setback to economic nationalists who seem to be on the rise lately. Arcelor’s shareholders accepted the bid of India-born Lakshmi Mittal despite the opposition of the board. This should be taken as an encouraging sign: Economic rationale defeated economic patriotism. Yet cross-border mergers remain sensitive and highly politicized – prompting politicians to interfere in business decisions.
Six months after his company launched a hostile takeover bid for the Luxembourg-based steelmaker Arcelor, Lakshmi Mittal finally succeeded. On June 25 Arcelor’s board agreed to sell the company to Mittal Steel for $32.2 billion. Mittal-Arcelor will be by far the world’s largest steel company in terms of output, revenue and market value. Shareholders approved of the deal because the two companies complement each other, both in the types of steel they produce and their geographical focus. In addition, the newly created giant will enjoy other advantages such as increased negotiating power with suppliers and synergies in purchasing, manufacturing and marketing.
See full Article.
Posts
