Monday, February 13, 2006

Yet more on the Arcelor, Mittal story

So Arcelor have made known a clause in a contract with Nippon that allows the Japanese steel company to withdraw the right to use patent technologies if the ownership of the company changes substantially.

I assume that they hope that this will make them less attractive as a potential take-over target. In fact Nippon is known to have some agreements with Mittal also, and whether or not they would invoke this clause is debatable.

I hold no strong opinion at this point in the desirability of the largest European steel manufacturer coming under the control of Mittal. I am however finding some of the tactics emerging from Arcelor to be tiresome. Only last week there was talk of acquiring US Steel, not as a strategic expansion, but to increase indebtedness and make them a less desirable acquisition.

It is surely for the shareholders (i.e. owners!) to ultimately decide whether or not this bid should succeed. No doubt there are going to be many more twists to this story yet.


sarvpriya said...

In our country, we believe its not just about mittal and arcelor but much more about east v/s west.
i feel sad when you hear people making all sort of racist comments.

Steve said...

I agree with you that it is unfortunate that some Arcelor officers have raised the issue of "cultural differences" between Arcelor and Mittal, when they are clearly refering to India/Europe.

This smacks of racism and should play no part in the decision making process. Mr. Mittal has clearly demonstrated his abilities to make profit in the Steel Sector. Whether or not the shareholders decide to accept the takeover bid should be based on what is good for the long term benefit of the company.