Arcelor S.A. was the world's largest steel producer in terms of turnover and the second largest in terms of steel output, with a turnover of €30.2 billion and shipments of 45 million metric tons of steel in 2004. The company was created in 2002 by a merger of the former companies

Aceralia Aceralia was a large Spanish steel producer formed in 1997 by restructuring of a group formed from earlier mergers of the steel producers ENSIDESA and ''Altos Hornos de Vizcaya''. The company merged into Arcelor in 2001, and became part of Arcelo ...

(Spain),

Usinor Usinor was a French steel making group formed in 1948. The group was merged with Sacilor in 1986, becoming Usinor-Sacilor and was privatised in 1995, and renamed Usinor in 1997. In 2001 it merged with Arbed (Luxembourg) and Aceralia (Spain) to for ...

(France) and

Arbed The Aciéries Réunies de Burbach-Eich-Dudelange ( French; literally "United Steelworks of Burbach-Eich-Dudelange"), better known by its acronym ARBED, was a major Luxembourg-based steel and iron producing company. Created in 1911 after the me ...

(Luxembourg). Arcelor is now part of

ArcelorMittal ArcelorMittal S.A. is a Luxembourgian multinational steel manufacturing corporation headquartered in Luxembourg City. It was formed in 2006 from the takeover and merger of Arcelor by Indian-owned Mittal Steel. ArcelorMittal is the second la ...

after a takeover by

Mittal Steel Mittal Steel Company N.V. was an Indian company and one of the world's largest steel producers by volume and turnover. After a merger in 2005, it is now part of ArcelorMittal. History Mittal Steel Company was formed as Ispat International in 19 ...

in 2006.

Business

Once employing 310,000 employees in over 60 countries, it was a major player in all its main markets: automotive,

construction Construction is a general term meaning the art and science to form Physical object, objects, systems, or organizations,"Construction" def. 1.a. 1.b. and 1.c. ''Oxford English Dictionary'' Second Edition on CD-ROM (v. 4.0) Oxford University Pr ...

, metal processing, primary transformation,

household appliances A major appliance, also known as a large domestic appliance or large electric appliance or simply a large appliance, large domestic, or large electric, is a non-portable or semi-portable machine used for routine housekeeping tasks such as cookin ...

, and packaging, as well as general industry. With total sales of over €40 billion, Arcelor was, by 2006, one of the world's largest steel manufacturer in terms of turnover. It produced long steel products, flat steel products and inox-steel. In January 2006 Arcelor announced the acquisition of

Dofasco ArcelorMittal Dofasco is a steel company based in Hamilton, Ontario, Canada. Dofasco is a standalone subsidiary of ArcelorMittal, the world's largest integrated steel producer. History Clifton and Frank A. Sherman founded Dominion Foundries and S ...

, Canada's largest steel producer with an annual output of 4.4 million tons. After an intense

bidding war A bid price is the highest price that a buyer (i.e., bidder) is willing to pay for some goods. It is usually referred to simply as the "bid". In bid and ask, the bid price stands in contrast to the ask price or "offer", and the difference between ...

against the German

ThyssenKrupp ThyssenKrupp AG (, ; stylized as thyssenkrupp) is a German industrial engineering and steel production multinational conglomerate. It is the result of the 1999 merger of Thyssen AG and Krupp and has its operational headquarters in Duisburg a ...

, Arcelor had finally bid 5.6 billion

Canadian dollars The Canadian dollar ( symbol: $; code: CAD; french: dollar canadien) is the currency of Canada. It is abbreviated with the dollar sign $, there is no standard disambiguating form, but the abbreviation Can$ is often suggested by notable style ...

Merger with Mittal Steel

The company was the target of a hostile takeover bid by its rival

on 27 January 2006. However, the bid resulted in substantial increase in Arcelor's share value. Two members of the board of Arcelor,

Guillermo Ulacia Guillermo Ulacia Arnaiz serves as Vice President of Aceralia Corporation Siderurgica SA. Biography Arnaiz served as the chief executive officer of Gamesa Corporación Tecnológica from December 1, 2005. He has previously served as Vice Chairman ...

and Jacques Chabanier also resigned suddenly. On 26 May 2006 Arcelor announced its intention to merge with

Severstal Severstal (russian: Северсталь, , Northern Steel) is a Russian company mainly operating in the steel and mining industry, headquartered in Cherepovets. Severstal is listed on the Moscow Exchange and LSE and is the largest steel compan ...

. Since then several economists, media and shareholders have questioned the intentions of Arcelor in announcing its merger with

due to a perceived opacity in the transaction. But on 25 June 2006, the Arcelor board decided to go ahead with the merger with

and scrapped plans for Severstal merger. The new company is now called "ArcelorMittal". Arcelor also paid Severstal €140 million as a "fine" for the fall-out of their failed talks.

Lakshmi Mittal Lakshmi Niwas Mittal (; born 15 June 1950) is an Indian steel magnate, based in the United Kingdom. He is the Executive Chairman of ArcelorMittal, the world's second largest steelmaking company, as well as Chairman of stainless steel manufacture ...

(owner of Mittal Steel) became the president and Joseph Kinsch (formerly Arcelor chairman) was appointed chairman of the new company till his retirement. Arcelor agrees to Mittal merger
on International Herald Tribune Arcelor's merger with Mittal created the worldwide leader in the steel industry, increasing its bargaining power with suppliers and consumers. Mittal Steel agreed to pay 40.37 euros a share to Arcelor, almost double the amount offered six months previous.

Reaction to the takeover

Arcelor's directors strongly opposed the takeover, as did the governments of France, Luxembourg and Spain. The Belgian government, on the other hand, declared its stance as neutral and invited both parties to deliver a

business plan A business plan is a formal written document containing the goals of a business, the methods for attaining those goals, and the time-frame for the achievement of the goals. It also describes the nature of the business, background information on ...

with the future investments in research in the Belgian steel plants. The French opposition was initially very fierce and has been criticized in the Indian media as double standards and

economic nationalism Economic nationalism, also called economic patriotism and economic populism, is an ideology that favors state interventionism over other market mechanisms, with policies such as domestic control of the economy, labor, and capital formation, incl ...

in Europe. Indian commerce minister

Kamal Nath Kamal Nath (born 18 November 1946) is an Indian politician who served as the 18th Chief Minister of Madhya Pradesh for approximately 15 months and resigned after a political crisis. He was the Leader of the Opposition in the Madhya Pradesh Le ...

warned that any attempt by France to block the deal would lead to a

trade war A trade war is an economic conflict often resulting from extreme protectionism in which states raise or create tariffs or other trade barriers against each other in response to trade barriers created by the other party. If tariffs are the exclus ...

between India and France. On June 20, the above claim by economists was confirmed when Severstal increased its valuation of Arcelor. Management of Arcelor had in fact undervalued the company itself. The capability of management which had openly supported the previous valuation of Arcelor came into question. Further the combined markets of France, Belgium, Luxembourg and Spain chided Arcelor management and suspended trading of its stock. On June 26, the Board of Directors recommended the approval of the improved Mittal offer (49% improvement compared to the initial offer with 108% improvement of the cash component), proposed the creation of Arcelor-Mittal with industrial and corporate governance model based on Arcelor and scheduled a corporate meeting for June 30 to vote on this.

Products

The products of Arcelor are divided into three groups: Flat steel products, long steel products and stainless steel.

Flat steel products

The main production sites of flat steel products are

Ghent Ghent ( nl, Gent ; french: Gand ; traditional English: Gaunt) is a city and a municipality in the Flemish Region of Belgium. It is the capital and largest city of the East Flanders province, and the third largest in the country, exceeded i ...

, Dunkirk, Avilés,

Gijón Gijón () or () is a city and municipality in north-western Spain. It is the largest city and municipality by population in the autonomous community of Asturias. It is located on the coast of the Cantabrian Sea in the Bay of Biscay, in the cent ...

Fos-sur-Mer Fos-sur-Mer (, literally ''Fos on Sea''; Provençal: ''Fòs'') is a commune in the Bouches-du-Rhône department in southern France. Geography Fos-sur-Mer is situated about north west of Marseille, on the Mediterranean coast, and to the west ...

Piombino Piombino is an Italian town and ''comune'' of about 35,000 inhabitants in the province of Livorno (Tuscany). It lies on the border between the Ligurian Sea and the Tyrrhenian Sea, in front of Elba Island and at the northern side of Maremma. Ove ...

, Liège,

Florange Florange (; Lorraine Franconian: ''Fléischengen''/''Fléschéngen''; ) is a commune in the Moselle department in Grand Est in north-eastern France. Geography Climate Climate in area is mild with few extremes of temperature and ample precipitat ...

, Bremen,

Eisenhüttenstadt Eisenhüttenstadt (literally "ironworks city" in German; , dsb, Pśibrjog) is a town in the Oder-Spree district of the state of Brandenburg, Germany, on the border with Poland. East Germany founded the city in 1950. It was known as Stalinstadt ( ...

and recently São Francisco do Sul in Brazil.

References

External links

Arcelormittal.com: ArcelorMittal corporate websiteArcelormittal.com: Constructalia
�� ''archived version''.
Nerve.in: Timeline of events for Arcelor-Mittal dealBBC News: "Mittal Steel unveils Arcelor bid"

�� ''archived version''. {{Authority control . Steel companies of Luxembourg Defunct companies of Luxembourg Companies based in Luxembourg City Manufacturing companies established in 2002 Manufacturing companies disestablished in 2006 2006 disestablishments in Luxembourg Luxembourgian companies established in 2002