The Steel War: Mittal vs. Arcelor

Published 02 Jan 2007
Reference 5424
Industry Mining & Metals
Region Europe
Length 37 page(s)

This case describes the hostile takeover bid by Mittal steel for Arcelor steel in what turned out to be one of the most acrimonious takeovers in European history. The battle began in January 2006 and lasted six months. From the outset, Arcelor's management resisted Mittal's deal using every possible defense involving politicians, bankers and public relations advisors, among others. There was even a proposed merger with a Russian company in a desperate effort to avoid the hostile takeover bid. Finally, on 25 June 2006, after the fierce battle that included allegations of racism and much animosity, Arcelor heeded its shareholders' wishes and accepted the bid. The initial offer was 18.6 billion and the final price paid by Mittal was 26.9 billion. During the six months, Mittal's share price had increased by almost 25%, with Arcelor's more than doubling.

Teaching objectives

This case is intended to address three sets of questions: 1. How has the market for corporate control changed in Continental Europe in response to globalized industry economics and associated competitive pressures, as well as performance pressure from institutional investors controlling global equity holdings? 2. What are the mechanics of hostile M&A transactions today in Europe, including the involvement of governments as owners and rulemakers, block shareholders, employees and other stakeholders? 3. What value do investment bankers add to such transactions?

  • Mergers and acquisitions, global investment banking, steel industry, corporate governance,hostile takeovers,cross-border transactions