Reference To Case Study Associated With Arcelor Mittal

Running head: REFERENCE TO CASE STUDY ASSOCIATED WITH ARCELOR AND MITTAL
Reference to Case Study associated with Arcelor and Mittal
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REFERENCE TO CASE STUDY ASSOCIATED WITH ARCELOR AND MITTAL1
Table of Contents
Introduction................................................................................................................................2
Discussion..................................................................................................................................2
Conclusion..................................................................................................................................8
Reference List............................................................................................................................9

REFERENCE TO CASE STUDY ASSOCIATED WITH ARCELOR AND MITTAL2
Introduction
ArcelorMittal is basically a successor company to Mittal Steel, a steel manufacturing
company that was founded in the year 1976 by a renowned businessman Mr Lakshmi N
Mittal who played a significant role as chief executive officer as well as he was a chairman of
a board comprising of company directors. Arcelor as well as Mittal Steel merged together to
form ArcelorMittal in the financial year 2006 (Cygler, Gajdzik and Sroka, 2014). Since
Mittal Steel underwent significant growth in terms of business operations from the year 1989
therefore it resulted into merger of two companies that incorporated several strategies
associated with consolidation along with good number of acquisitions. The current report
discusses about various benefits and losses incurred by the companies after formation of
collaboration as well as modification in the structure of organization. It also discusses certain
negative as well as positive impacts due to effectiveness of Mittal Steel as reviewed from the
article Financial Times.
Discussion
1. Assessment of post-merger structure of board and various pros as well as cons
before reviewing the article for Financial Times
The structure of post-merger board is made up of 18 power members including Joseph
Kinsch who was basically the chairman of the company Arcelor before it merged with
Mittal steel, president of Mittal steel, Lakshmi Mittal, there are nine directors of the
Company that also includes representatives of employees as well as nominee directors
who take care of demands of shareholders of the Company. The Board associated with
General Management is under the chairmanship of Roland Junck who is the CEO at
present and Aditya Mittal, the son of Mittal Steel Company director (Haider, 2014). As a
result of this merger as well as acquisition, steelmakers today have decided to achieve

REFERENCE TO CASE STUDY ASSOCIATED WITH ARCELOR AND MITTAL3
two goals that are mainly purchasing of additional capacity in terms of production and
they want to improve their cost framework as well as increase value of shares present in
the market. As a result of merging, it is now able to produce output that is almost four
times that of biggest firms in Steel Industry that is Nippon Steel and almost eight times
more than that of SAIL that is the one of the largest steel manufacturers. On the basis of
leadership quality and due to actions planned by post-merger structure of board it can be
stated that 35% of the world’s steel production will come from ArcelorMittal in coming
10 years. Strategies towards consolidation of firms Arcelor as well as Mittal steel shall be
driven through various fits that would help to secure deals that would be financially-
centred in years to come. The company has shown rapid progress since 2006 in terms of
wide availability of raw materials, good capacities towards production, implementation of
new technologies or patenting the existing ones and has facilitated large global supply in
the market both domestic as well as international.
It is expected that small scale industries that are concerned with steel production may
undergo merge with big steel producers like ArcelorMittal that has 20 million tonnes of
productivity every year with an approximate market share of 51% as they want to
improve their place in the market by getting availability towards good quality raw
materials. The Company has now reports of operating income of approximately $12
billion every financial year (Tirian et al. 2017).
However due to rising of certain problems in the year 2008 in December, the merger
Company declared for closing various plants like Steel Plant of Bethlehem in
Lackawanna in New York as there was a conflict due to buying of properties at
Kryvorizhstal that led to increased rate of employee turnover that reduced from 57000 to
30,000 in that year. In the financial year 2010, the firm suffered due to falling of
operating income up to $4.9 billion and sales of goods also fell at a rate of 10%. The