Book Reviewed By : Dr. Mrs. Smita Kachole ( Associate Professor)

GES J.D.C. Bytco Institute of Management Studies and Research Nashik-5

The line on top of the front cover of the Book, “A rare, insiders account  … reads like a thriller” is the most fitting description of the book.

The takeover and merger of Arcelor and Mittal the world’s two largest steel producers and the fight that continued for five months before it actually happened– is considered as one of the epic corporate battles. The authors conducted more than sixty face to face interviews with people closely involved- lawyers, bankers, public relations along with the main characters to bring out the story behind the event.

The book begins with Henry Bessemer, an Englishman who invented the ‘Converter’ blast furnace to produce tonnes of steel in a short time.It talks about the Carnegie Steel Company which one day would become US Steel. Invention of stainless steel by Harry Brearley in 1913, more refinements in steel making process are described. We get information about ‘Long’  steel, known as volume steel used for reinforce concrete, railroad tracks, structural girders and bridges, and the higher quality ‘flat’ steel used for car bodies,  trains, washing machines and other ‘white ‘ goods.

Then the book briefly narrates some history of the steel industry worldwide. Generally having an exponential growth, it has had its highs and lows from 1900 to 2002. Also at one time, the governments worldwide considered the steel industry to be indicators of economic powers due to the role these industries played in economic development. With time, privatization of this industry brought new technology – the mini-mill. This could melt ‘cold’ scrap and was a cheaper process.

Globally, for a long tome the steel industry was fragmented and consolidation of these companies into bigger and better companies would help steel makers to gain greater pricing power, increasing their profitability and the value of their shares.

Two groups, Mittal Steel and its nearest rival; Arcelor were moving ahead of other steel companies on the same lines. Then takes place the public auction of‘Kryvorizstal – the Ukranian Steel Company’ in October 2005.  The author vividly describes the competition between the two rivals- the efforts to win the auction or at least make it financially a bad decision for the competitor. This paints the background of the drama of this takeover.

Before beginning with the events to follow; the author, in Bollywood like flashback brings the readers up to date with a brief biography of the hero of this book – The Indian born Steel baron- Mr. Laxmi Niwas Mittal. The humble background of the Marwari family from Sadulpur, Rajasthan, India, the move to Calcutta in search for better fortune, school life and graduation from  St. Xavier’s,  foundation of Ispat- the family owned Steel manufacturing venture, his marriage and the birth of his son to his first independent venture in Indonesia and more. This chapter connects the dots as to how he came to be the Business Magnate that he was when the Arcelor – Mittal event happened.

The rest of the book resembles the story of a battlefield. The meeting with the CEO of Arcelor for considering a friendly merger, fear of Arcelor about the possible takeover and the Project Tiger, Guy Doll’e (Arcelor CEO)  taking a  stand to defend at any cost, the planning for a hostile takeover, the secrecy, attacks and counterattacks that went on for months liken it to a war.  The book describes the innumerable factors that were considered – financial, commercial, socio-cultural, national, political, and emotional and so on. The event truly has International Business dimensions to it. The authors bring fantastic insights into various management related aspects behind the success of Mr. LakshmiNiwas Mittal that may be summarized as follows:

• Planning that encompasses all aspects of the activity
• Flexibility – Prepared to reduce voting rights on shares
• Convincing power- through careful study of the various governments and their officials, nations/people involved and their aspirations- Mittal agreed to have the headquarters of the Company at Luxembourg and rather than calling the new company as Mittal- Arcelor, it was Arcelor-Mittal.
• Hard work- Huge efforts for a very long period of time
• Risk – taking ability

The Arcelor CEO also displayed some characteristics that ultimately resulted in his loss:

• Using a phrase that meant “Monkey money” against advice- shows that you must always be correct in language usage.
• Arcelor team always thought that Mittal will have to offer cash to the shareholders in the hostile takeover process. Afterwards they realized that they were not fully aware of their own company’s rules and their loopholes.
• Even after the hostile takeover was announced, the Arcelor management struggled for resistance. The CEO thinks ‘What was Project Tiger doing all this time?’ No plan was ready.
• The Arcelor CEO had a personal ambition of retiring as the Chairman of Arcelor, the largest Steel Company in Europe. This made him unnecessarily bitter and personal. This compelled him to go out even if he was offered to remain with the company even after the takeover- merger.

One feels awed… and cannot keep this business-thriller down before you read it all.