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The Steel war: Mittal vs. Arcelor

Author: Walter, Ingo ; Cagna, Anne-Marie ; Milstein, SeymourINSEAD Area: FinancePublisher: Fontainebleau : INSEAD, 2007.Language: EnglishType of document: INSEAD CaseNote: Latest version available via https://publishing.insead.eduAbstract: This case describes the hostile takeover bid by Mittal steel for Arcelor steel in what turned out to be one of the most acrimonious takeovers in European history. The battle began in January 2006 and lasted six months. From the outset, Arcelor's management resisted Mittal's deal using every possible defense involving politicians, bankers and public relations advisors, among others. There was even a proposed merger with a Russian company in a desperate effort to avoid the hostile takeover bid. Finally, on 25 June 2006, after the fierce battle that included allegations of racism and much animosity, Arcelor heeded its shareholders' wishes and accepted the bid. The initial offer was €18.6 billion and the final price paid by Mittal was €26.9 billion. During the six months, Mittal's share price had increased by almost 25%, with Arcelor's more than doubling.Pedagogical Objectives: This case is intended to address three sets of questions: 1. How has the market for corporate control changed in Continental Europe in response to globalized industry economics and associated competitive pressures, as well as performance pressure from institutional investors controlling global equity holdings? 2. What are the mechanics of hostile MandA transactions today in Europe, including the involvement of governments as owners and rulemakers, block shareholders, employees and other stakeholders? 3. What value do investment bankers add to such transactions?
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Latest version available via <a href=https://publishing.insead.edu>https://publishing.insead.edu</a>

This case is intended to address three sets of questions:
1. How has the market for corporate control changed in Continental Europe in response to globalized industry economics and associated competitive pressures, as well as performance pressure from institutional investors controlling global equity holdings?
2. What are the mechanics of hostile MandA transactions today in Europe, including the involvement of governments as owners and rulemakers, block shareholders, employees and other stakeholders?
3. What value do investment bankers add to such transactions?

This case describes the hostile takeover bid by Mittal steel for Arcelor steel in what turned out to be one of the most acrimonious takeovers in European history. The battle began in January 2006 and lasted six months. From the outset, Arcelor's management resisted Mittal's deal using every possible defense involving politicians, bankers and public relations advisors, among others. There was even a proposed merger with a Russian company in a desperate effort to avoid the hostile takeover bid. Finally, on 25 June 2006, after the fierce battle that included allegations of racism and much animosity, Arcelor heeded its shareholders' wishes and accepted the bid. The initial offer was €18.6 billion and the final price paid by Mittal was €26.9 billion. During the six months, Mittal's share price had increased by almost 25%, with Arcelor's more than doubling.

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