After the transformation of Lloyds Bank from an unfocused and underperforming group to a focused highly-performing bank under Brian Pitman (1983-1996), the incoming CEO takes on the challenge of redefining the bank’s strategy and operations, facing difficult choices regarding the firm’s scope and internationalization.

Arcelor believes its shares are undervalued and has to decide whether to buy back stock via a repurchase tender offer or via an open market repurchase. Before doing so, it has to value the company to get an estimate of the fair value of the company. It has also to decide whether it can afford the buyback: is the increase in leverage a move to a better capital structure?

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.