Arcelor SA yielded to a sweetened bid from Mittal Steel Co. on Sunday, ending a bitter five-month takeover battle in a deal to create a steel titan with nearly 10 percent of the global market.
This mega steel company will be truly a global company, merging operations in Europe, Latin America, Asia and Eastern Europe.
How will this affect steel making and consuming industries here in the US?
This deal is so large, it's hard to grasp. The principles see this as a watershed event.
“This is one of the greatest days in the history of Mittal Steel and a seminal event in the steel industry that will shape its future,” said Mittal Steel Chairman and CEO Lakshmi Mittal.
"Shape its future"? That sounds pretty serious.
No, obviously there is still lots of steel and steel providers to go around, but the numbers are impressive.
The new company would dwarf other steelmakers, controlling close to 10 percent of world steel production, churning out 120 million tons of crude steel a year and employing more than 320,000 people.
So, if the deal is approved by Mittal's shareholders, it will be interesting to see what happens next. Will there be other mergers to hedge against being crushed by this behemoth? Who knows, but you can be sure that US steelmakers are watching carefully. If steel gets more costly, you can be sure we'll all be watching too.
We are already struggling as a steel producing nation. We certaintly couldn't compete heads up with the Asian and Eastern Block as it was. This may push the USA out of the market.
Posted by: Tim Whelan | June 26, 2006 8:45 PM | Permalink to Comment