Arcelor-Mittal Essay

519 Words3 Pages
Arcelor- Mittal 1. What additional complexities do cross-border deals such as Mittal-Arcelor bring? Cross-border complexities encountered in the Mittal-Arcelor deal: • Cultural barriers that translated into personal attacks, false accusations, and allegations of racism. • Fear that the combined company would be lead by management of a certain nationality. • Transaction documentation needed to be filed with the authorities in all the countries where Arcelor and Mittal listed their shares (France, Spain, Belgium, Luxembourg, and Holland). In addition, a registration statement was submitted to the SEC in the US. • Multiple governments (Luxemburg and Wallonia) being shareholders of the target company. If the Mittal-Arcelor merger was completed and jobs were cut, then these governments’ promise to keep their constituents employed would be broken. However, jobs were not about to be cut as Mittal and Arcelor (even they were competitors), they complemented each other’s strengths and competencies. • Scrutiny from multiple governments (especially those of France and Luxemburg) that could derail the deal should it not be to their liking. • Lobbying by the Indian government to convince the French government that this was a good deal . • Scrutiny from competition authorities in the EU and the US. • Need to divest assets in order to obtain approval of competition authorities in the US (but not in the EU). • Involvement by a plethora of politicians. • Distortions of true facts – for example, Mittal was a European company headquartered in the UK, but President Chirac stated that “France had nothing against a non-European company taking over a European company.” • Multiple investment bankers were involved in both advising and syndicating this deal. • Values, culture and tradition are important factors in Europe as opposed to creating shareholder value
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