Lakshmi Mittal and the Growth of Mittal Steel Essay

775 Words Nov 24th, 2010 4 Pages
In 2007 a controversial merger between Mittal Steel and Arcelor closed, creating ArcelorMittal. The merger was the brain child of Mittal CEO, Lakshmi Mittal and his son, Aditya. Under Lakshmi's leadership, the family owned Mittal Steel had grown from obscure origins in India to become the largest steel company in the world. The story dates back to the early 1970s. At that time, the family-owned company was facing limited growth opportunities in India. Regulations constrained expansion opportunities, and Mittal was facing competition both from state-owned rival, Sail, and a private national champion, Tata Steel. So Lakshmi's farther financed his son, helping him set up a steel-making plant from scratch in Indonesia in 1975. To reduce costs …show more content…
He also saw the opportunity to use the purchasing power of a global steel company to drive down the price it would have to pay for raw material inputs. In 1992 Lakshmi made his next move, buying Sibalsa of Mexico, a state-owned steel company that was being privatized. This was followed in 1994 by the purchase of the fourth-largest Canadian steel maker from the government of Quebec. Then in 1195 there was the purchase of a midsized German steel maker and Kazakhstan’s largest steel maker, which was at the time in disarray as the country transitioned from a socialist system to a more market-based economy. By this time, Lakshmi was hungry for more international growth, but his company was capital constrained. So he decided to take it public, but not in his native India or Indonesia, where the liquidity of the capital markets was limited. Instead, 1997 he moved the company’s headquarters to Rotterdam, and then offered stock in Mittal Steel for sale to the public through both the Amsterdam and New York stock exchanges, raising $776 million in the process. With capital from the IPO, Mittal purchased two more German steel makers in 1997. This was followed in 1998 by the acquisition of Inland Steel Company, a U.S. steel maker. Over the next few years, more acquisitions followed in France, Algeria, and Poland among other nations. In 2005, Mittal purchased International Steel, a company formed from the integration of troubled U.S. steel makers that had been in

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