Arcelor Mittal Takeover

Published 30 Jan 2009
Reference 5471
Region Europe
Summary

The case describes the hostile bid of Mittal for Arcelor in the first half of 2006. It documents stock price behaviour around the crucial events surrounding the acquisition. It also provides estimates of synergy benefits as well as a spreadsheet that allows students to calculate directly the implications of synergies for shareholder value.

Teaching objectives

The goal of the case is to illustrate the different defence mechanisms firms can employ in hostile bid situations. Students are expected to explain why the market reacts in a particular way to the various takeover defences. The case allows calculation of synergy benefits as estimated by Mittal as well as market estimates by measuring announcement returns. It also enters into a discussion of optimal acquisition finance.

Keywords
  • Mergers and Acquisitions
  • Hostile Bids
  • Takeover Defenses
  • Valuation of Synergies
  • Acquisition Finance
  • RD0109
  • AR0809
  • AR2009
  • Corporate Governance
  • Investors, Stakeholders and Accountability