Since its inception, ArcelorMittal has rapidly grown through a successful consolidation strategy with a number of significant acquisitions. According to ArcelorMittal (2012), the company is the successor to Mittall Steel, a business originally set up in 1976 by Lakshmi N. Mittal, CEO and chairman of the board of directors (paras 1-2).
ArcelorMittal moved the company’s headquarters to Rotterdam in 1997 (Hill, 2011, p. 261). The company currently has 260,000 employees across 60 countries and is the world’s leading steel and mining company (ArcelorMittal, 2013, para 1).
In addition to the information above, a brief timeline of ArcelorMittal acquisitions may be reviewed below (Steelonthenet.
com, 2013, para 2). The company has been quite successful.
In respect to the information above, I will begin to discuss the case study questions in the next section.
According to Hill (2011), one of the major forces that drove Mittal to start expanding across national borders were the limited growth and expansion opportunities because of weak market conditions primarily due to competition from SAIL, a state-owned rival, and a private national champion, Tata Steel (para 1). Thus, Mittal began to look for opportunities across national borders because the market was not good enough for Mittal Steel to grow.
Greenfield investments is one form of federal direct investment (FDI) which involves establishing a new operation in a foreign country (Hill, 2011, p. 232). The second FDI is acquiring or merging with a company in a foreign country (Hill, 2011, p. 232).
Thus, Mittal Steel was heavily involved in acquisitions and mergers because the economy had been in a slump for a quarter century due to access capacity and slow demand for steel and a higher demand for substitute materials (Hill, 2011, p. 261). Mittal had a successful business, expertise, and capital to help struggling businesses. In addition, he saw an opportunity to purchase the assets of struggling businesses for cheap (Hill, 2011, p. 261). According to Hill (2011), Mittal believed that eventually the economy will turn around (p. 261).
The benefits that Mittal Steel bring to the countries that it enters are the increases in revenue, employment, resources, business expertise, etc. (Hill, 2011, p. 249). One drawback may be that the ownership is held by a foreign business.
The business becomes a global business. Its assets increased by acquiring other businesses that were having problems. In addition, this allowed Mittal to diversify itself. For example, it was able to make an Initial Public Offering (IPO) to the public in Amsterdam and New York stock exchanges as an effort to raise capital (Hill, 2011, p. 261). This increased its buying power to acquire additional struggling businesses. The ultimate benefit is that it is now the leading steel and mining company.
I believe the objection was mainly due to the fact that a European business was acquired by a foreign entity – Indian, now legally Dutch (Hill, 2011, p. 261).
This an interesting and thought provoking case concerning mergers and/or acquisitions.
ArcelorMittal (2013). ArcelorMittal-transforming tomorrow. Our history. Retrieved on January 23, 2013 from http://www.arcelormittal.com/corp/who-we-are/our-history
ArcelorMittal (2013). ArcelorMittal-who we are at a glance. Retrieved on January 23, 2013 from http://www.arcelormittal.com/corp/who-we-are/at-a-glance
Hill, C. (2011). International Business: Competing in the Global Marketplace. McGraw-Hill/Irwin, New York.
Steelonthenet.com (2013). History of ArcelorMittal. Retrieved on January 23, 2013 from http://www.steelonthenet.com/kb/history-arcelor-mittal.html
Remember! This is just a sample.
You can get a custom paper by one of our expert writers.
Get your custom essay
Helping students since 2015
Essay Writing Service Features
Our Experience
No matter how complex your assignment is, we can find the right professional for your specific task. Contact Essay is an essay writing company that hires only the smartest minds to help you with your projects. Our expertise allows us to provide students with high-quality academic writing, editing & proofreading services.
Free Features
Free revision policy
$10Free bibliography & reference
$8Free title page
$8Free formatting
$8How Our Essay Writing Service Works
First, you will need to complete an order form. It's not difficult but, in case there is anything you find not to be clear, you may always call us so that we can guide you through it. On the order form, you will need to include some basic information concerning your order: subject, topic, number of pages, etc. We also encourage our clients to upload any relevant information or sources that will help.
Complete the order form
Once we have all the information and instructions that we need, we select the most suitable writer for your assignment. While everything seems to be clear, the writer, who has complete knowledge of the subject, may need clarification from you. It is at that point that you would receive a call or email from us.
Writer’s assignment
As soon as the writer has finished, it will be delivered both to the website and to your email address so that you will not miss it. If your deadline is close at hand, we will place a call to you to make sure that you receive the paper on time.
Completing the order and download
