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Lakshmi Mittal and the Growth of Mittal Steel

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Presentation on theme: "Lakshmi Mittal and the Growth of Mittal Steel"— Presentation transcript:

1 Lakshmi Mittal and the Growth of Mittal Steel
Sophie Wang Akash mathran Berre simonse Divya yadav Rafael alvarez

2 Content Summery of the case Answers to questions
Current events involving Mittal Steel

3 Summery of the case Limited growth opportunities India New plant in Indonesia Take-over supplier by Mittal steel Global steel industry in a slump Purchase inefficiently run steel companies 1992/ Acquired steel companies in Mexico & Canada German steel takeover with new capital from IPO Approved controversial merger between European giant Arcelor & Mittal steel. Making ArcelorMittal the largest steel company of the world.

4 Question 1 What forces drove Mittal Steel to start expanding across national borders? Limited growth opportunities in India - government regulation - competition (SAIL, Tata Steel) Opportunities in foreign counties - new method to reduce cost - steel industry was about to turn a corner

5 Question 2 Mittal Steel expanded into different nations through mergers and acquisitions, as opposed to greenfield investments. Why? Economy was in a slump - Weak companies are cheaper to buy Not having to recruit new skilled employees Time is money

6 Question 3 What benefits does Mittal Steel brings to the countries that it enters? Are there any drawbacks to a nation when Mittal invests there? Benefits - New machinery - Job opportunities - Supply of steel Drawbacks - Taking money out of the country - Competition for domestic suppliers - Pollution

7 Question 4 What are the benefits to Mittal Steel from entering different nations? Global company High risk and high hope - Prices to rise in the future Price setter - Monopoly power Buying companies cheaper than starting new ones

8 Question 5 The acquisition of Arcelor was very acrimonious, with many politicians objecting to it. Why do you think they objected? Were their objections reasonable? Objections - Nationalistic behavior (not reasonable) - Monopoly power (reasonable)

9 So what happened after the case?
Lakshimi Narayan Mittal 6th richest person in the world In top 100 most influential people in the world 10% production of steel in the world Chairman and CEO 40% of shares ArcelorMittal

10 Steel bubble in

11 Current events for ArcelorMittal
June 2010 – European Commission fined 17 steel producers for running a price-fixing cartel. January 2011 – Board voted to split off the stainless steel division into a new company “Aperam’’

12 ArcelorMittal’s future
Looks good Expanding production in Canada doubling production in Quebec Research and Development 2-year plan

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