Lakshmi Mittal and the Growth of Mittal Steel
MGMT 235 International Business
July 26, 2011
Professor Frederick L. Fisher, II
Mittal Steel is a huge conglomerate built and controlled by Lakshmi Mittal and his family. The corporation is registered in Rotterdam, is listed on the Netherlands and New York stock exchanges and has operations throughout much of the world (World Socialist, 2011). While Mittal was born in India and holds an Indian passport, he lives in London. Currently his company has no production facilities in India although in October 2005 it signed a deal to invest of $9 billion in a steel mill in the Indian state of Jharkhand (World Socialist, 2011). A massive takeover bid, upped in May 2006 by 34 percent to 25.8 euros ($US33 billion) (World Socialist, 2011), is currently underway by the world’s largest steel producer, Mittal Steel, for the world’s second largest, Arcelor. If successful, the massive new conglomerate had an annual output of around 110 million tons or about 10 percent of world steel production—three to four times that of its nearest rivals (World Socialist, 2011). With annual sales of $69 billion and 320,000 employees worldwide, it was the leading steelmaker in five of the world’s nine major markets (World Socialist, 2011). What forces drove Mittal Steel to start expanding across national borders? The Mittal Steel began in the early 1970’s as a small, family owned company, based in India (Hill, 2011). However, due to a range of restrictive government regulations and tough competitiveness from SAIL (a state-owned firm) and Tata Steel (large privately owned firm) (Hill, 2011), Mittal Steel believed that the best projection of growth of the company would transpire outside of India. In 1975, Mittal Steel began expanding across national borders by creating and building a steel making plant in Indonesia (Hill, 2011). Mittal Steel expanded into different nations through mergers and...