|Rediff India Abroad Home | All the sections|
Laxmi Mittal on how he won the Arcelor deal
August 10, 2007 21:49 IST
It was his nerves of steel and perseverance that helped the world's largest steel producer Laxmi Niwas Mittal clinch the $33-billion deal for Luxembourg-based Arcelor Steel despite hostility.
"We really had to dig deep in our resolve to effect a successful conclusion of transaction with Arcelor. It was a challenging six-month period following our acquisition offer as it (Arcelor) had decided to fight us tooth and nail to remain independent," Arcelor Mittal president and CEO L N Mittal said at the 45th Convocation of Indian Institute of Technology, Bombay, on Friday.
The world's largest steel producer, Mittal Steel, had made a daring $33-billion offer to take over its rival Arcelor to create the first over 100 million-tonne steel company.
Arcelor had used all power and contacts within its reach to prevent the merger from going ahead. Initial reaction was so hostile that we expected every possible form of defence from Arcelor, Mittal said.
Mittal recalled a couple of days after making the offer to Arcelor. He was flying in a chopper to Paris when he noticed a military helicopter with armed personnel tailing it.
First thing which came into our minds was another tactic from Arcelor to block the merger. We were forced to land and were told that our helicopter had entered into a restricted flying zone, he said.
As a fallout, the captain of the helicopter, upset with the incident, resigned as he was unable to take such pressures, Mittal added.
"But we persisted with the deal. In such a long drawn out and bitterly contested battle, perseverance was crucial element in reaching a successful conclusion," Mittal said.
The efforts of Arcelor to stall the deal did not end there. Soon, it attempted to push a deal with Severstal, its Russian competitor.
"For next 24 hours, we felt that all our efforts of past four months would go down the drain. But we did not give in. We kept fighting to demonstrate to the shareholders that a deal with Mittal Steel made much more strategic sense," Mittal said.
This led to a recommendation by the Arcelor board of directors for a deal with Mittal Steel to forge the first 100 million tonne steelmaker, the NRI steel tycoon said.
To the graduating students, Mittal said they should desist going to the US for jobs and be in India as its robust economy was providing ample opportunities.
"Many students, soon after passing out from the IITs head towards Silicon Valley. This may be a good news for US, but not for India. The country spends millions to train engineers and scientists expecting that they would contribute towards the country's economic and social development," Mittal said.
The country's growing economy was not only enabling home grown companies to emerge as global competitors, it was also attracting hordes of major multinational companies, he added.
"India is today providing exciting opportunities for those of you with more entrepreneurial dispositions," he said.