Before the Merger, Arcelor Had a Lower Share Than Mittal

Before the merger, Arcelor had a lower share than Mittal. In this aspect, Arcelor can claim success because the merger will help them raise their share. Arcelor had also acquired 44% more than first offer, therefore in cost, Arcelor won. Mittal loses some of his board of directors to Arcelor. Therefore, Arcelor was responsible for controlling the board and managing the internal political issue. Arcelor had higher revenues that Mittal, and before the merger, Mittal was short of cash. According to Dolle, leader of Arcelor, there will be an interruption in Arcelor’s cash flow due to Mittal short of cash. Dolle also added that Mittal will use Arcelor’s cash to modernise its older plant in Eastern Europe and the US. Base on this Mittal can claim some success. Before the merger, Mittal had less control of its distribution. The merger could help Mittal gain stronger control of its distribution. According to Ross, Mittal Merging with Arcelor will enable Mittal accelerate in its long-term strategy and growth plan, enabling its shareholders to benefits immediately from exposure to low-cost, fast-growing development market (Dev, 2006). The Merger gave Mittal the opportunity to deliver to its shareholders immediately the business model that they wanted but that otherwise would have taken Mittal years to achieve (Dev, 2006).

In India too, Mittal Steel is setting up a plant in Jharkhand which will now be controlled by the new entity. Arcelor had earlier said that it wants to set up plants in emerging markets like India and China (Azom Corporation, 2006). With Mittal steel already having a presence here, Arcelor need not worry about these two key markets. Arcelor is strong in supplying raw materials to auto segment and Mittal strength lies in supplying to commercial segment. Both Companies will benefit from each other on this aspect (Azom Corporation, 2006).

Evaluating the takeover, it can be argued that both companies won in their respective aspect. Though,