Lakshmi N Mittal hasn't been putting in much time at the office these days. Instead, the chairman and chief executive of London- and Rotterdam-based Mittal Steel, the world's largest steelmaker, has been jetting around Europe trying to sell skeptical politicians and shareholders on his $23 billion bid for Luxembourg-based Arcelor, the industry's No. 2 player.
The fight for Arcelor has a bitter edge, perhaps because Mittal and Arcelor CEO Guy Dollé know each other well, and have raced each other to assemble strong companies in what had been a weak and fragmented industry.
Mittal, 55, talked to BusinessWeek's London bureau chief, Stanley Reed, on January 31 by phone from Luxembourg. Following are edited excerpts of their conversation:
What appeals to you about this deal?
The industrial logic. [Arcelor and Mittal Steel] have a shared vision and strategy. It will also increase the liquidity of our stock. The combination would have more than 49% liquidity [free float] vs. just 12% for [Mittal Steel] today. That will definitely be a big improvement. It will be a much larger entity as well.
Would the new company have more stable earnings?
Stability depends on consolidation of the industry. If the industry continues to consolidate, it will be much stronger. [Mittal Steel] will be a growth stock. Since we have announced this transaction, the share prices have improved not only for Mittal Steel and Arcelor, but for the steel industry in general.
Do you think you need to improve corporate governance?
We have said that we will have a majority of independent directors. We will have directors from the various countries [where Arcelor has operations]: France, Spain, and Brazil. We [the Mittal family] will be a minority on the board, and the company will be run by professionals.
Would you give up
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