International Business

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  • Topic: ArcelorMittal, Arcelor Mittal, Mittal Steel Company
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  • Published : October 9, 2012
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Case study

CASE STUDY: LAKSHMI MITTAL AND THE GROWTH OF MITTAL STEEL

QUESTION 3: What benefits does Mittal Steel bring to the countries that it enters? Are there any drawbacks to a nation when Mittal Steel invests there?

ANSWER 3: Mittal Steel brings several benefits to the countries that it enters. It’s presence in the market is beneficial as it focuses on acquiring and improving distressed companies. These acquisitions also help contribute more capital to each country. However, they are also some drawbacks. In Mittal Steel’s most recent acquisition of Arcelor, they were many concerns. European politicians opposed this acquisition because they felt as if Mittal Steel was end India Enterprise. They thought this would have negative impacts on the European economy after the recent global crisis.

QUESTION 4: What are the benefits to Mittal Steel from entering different nations?

ANSWER 4: By being a player in multiple markets, Mittal Steel has diversified its income streams, and reduced its dependence on any single market. In addition, its global presence enables it to control to some extent the price of raw materials in the industry. In our opinion, we also recognize that the prospects for growth in the steel industry almost imply growing across borders, simply because of limited demand within any single market.

QUESTION 5: The acquisition of Arcelor was very acrimonious, with many politicians objecting to it. Why do you think they objected? Were their objections reasonable?

ANSWER 5: In 2006, the shareholders of Arcelor, a European firm formed through the merger of steel makers from three European countries, approved the acquisition of Arcelor by Mittal Steel. Many politicians, who saw the acquisition as a threat to their countries, objected vehemently to the merger. We suggest that their opposition to the deal probably related to concerns that Mittal Steel had no particular loyalty to Europe and would simply make decisions that...
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