Arcelor

Arcelor S. A. was until 2006 the world's second largest steel producer. Arcelor in 2006 was taken over by the competitors Mittal Steel Company and merged into ArcelorMittal 2007.

History

Arcelor was headquartered in Luxembourg and was established in 2001 by the merger of the Spanish Aceralia, Luxembourg Arbed and the French Usinor. 2002 Guy Dolle head of the company. After the successful hostile takeover of Arcelor by Mittal Steel Company in June 2006, Lakshmi Mittal took over the post of Managing Director.

Key data

Arcelor was the world's largest by revenue, according to tonnage of the second largest steel producer. In 2003, EADS generated revenues of € 25.923 billion and led to a net profit of 257 million euros. 2004, sales rose by 16.4% to 30.176 billion euros, with a net profit of 2.314 billion euros. 2005, sales increased by a further 8.1 % to 32.611 billion euros, with a net profit of 3.846 billion euros. In the first quarter of 2006, revenues totaled 9.565 billion euros, which represents an increase of 17.3 % compared to the first quarter of 2005.

Crude steel production was 46.7 million tons in 2005. Of the three German plants Arcelor steel plants in Bremen, Ekostahl ironworks city and Maxhiitte Unterwellenborn the first two now include ArcelorMittal, the third was sold to the Brazilian Companhia Siderúrgica Nacional (CSN).

The company employs approximately 96,000 employees in over 60 countries (as of 31 December 2005). The activities of the Arcelor group covered the areas of long products, flat products, stainless steel and the field of prefabrication. Main markets were the automotive, construction, packaging, household and general mechanical and plant engineering.

Corporate strategy

Arcelor was assumed that five to six businesses would dominate the steel industry in a few years. Thus the oligopolies of the raw material suppliers and the customers should be addressed. Therefore, Arcelor was interested to take outside Europe steel companies. The focus was in Brazil, Russia, India and China.

On January 24, 2006 Arcelor announced to take over the largest Canadian steel producer Dofasco for the equivalent of about 3.95 billion euros after ThyssenKrupp had presented no new commandment in the bidding war. The acquisition of Dofasco finally took place on 21 February 2006. Thus Arcelor had grown to 11,000 employees and around 2.7 billion euros.

Takeover by Mittal Steel Company

On 27 January 2006, the world 's largest steel company, Mittal Steel Company announced that it will provide 18.6 billion euros for the acquisition of Arcelor. Thus would arise a new steel company, with a crude steel production of over 120 million tons per year. At the same time it was announced that after a successful takeover by Mittal acquired Arcelor just getting by Canadian company Dofasco should be sold to ThyssenKrupp. The purchase price was approximately the cash portion of the bid for Arcelor. This anticipated objections of American antitrust authorities should be addressed. On January 29, the Board of Directors of Arcelor announced its intention to ward off the hostile takeover. The shareholders he advised that not for sale to Mittal. The Grand Duchy of Luxembourg as the largest single shareholder rejected the first bid from also.

To fend off the takeover, the management tried to convince the shareholders that they could expect higher profits with an independent Arcelor. Therefore, a business plan was presented, which provided that 30% of the cash flow would be distributed to the shareholders. As a consequence of this strategy, the already specified with € 1.20 dividend for 2006 was increased to 1.85 € and the Shareholders made ​​an additional payment of EUR 5 billion within a year in prospect. The then distributed a total sum surpasses the cash portion of the offer by Mittal takeover bid.

Arcelor had transferred to ward off the takeover by Mittal 's Dofasco shares to a foundation under Dutch law, which should be a sale of Dofasco after a hostile takeover virtually impossible. Mittal could therefore no longer compensate for the cash portion of its offer. In addition, the acquisition would be unlikely to be approved competition law in North America. On the other hand, this also Decrease the possibility of Arcelor continue to actively participate in the transformation of the steel industry.

On 19 May 2006 Mittal increased its takeover offer to 26 billion euros. At the same time offered the Mittal Arcelor shareholders higher premiums and admitted by the Luxembourg Government concessions one, as the relocation of the headquarters of Mittal Luxembourg. At the same time called Arcelor a meeting of shareholders to repurchase Arcelor shares with a value of 5 billion euros. As this meeting was not quorate, the decision on further action needed to avert June 2006 had to be postponed.

On May 26, Arcelor announced to want to merge with the Russian steel group Severstal, which the new group would replace Mittal as the largest steel company.

On 11 June, the Arcelor management rejected the increased offer from Mittal and recommended its shareholders the merger with Severstal, but agreed to hold talks with Mittal Steel over another offer.

On 25 June, the Arcelor management agreed to a further increased offer from Mittal Steel in the amount of 25.4 billion euros; from Mittal and Arcelor Arcelor Mittal has now, by far the world's largest steel producer. Arcelor Mittal Arcelor is listed instead in the financial index CAC40 from November 2006.

Stock Trading

The company's shares (ISIN LU0140205948, symbol ARR ) were traded in Paris, Brussels, Madrid and Luxembourg in the stock market. 85 % of the shares were in free float. The largest single shareholder was 5.6 % of the State of Luxembourg.

Flat steel production sites

The main production facilities of flat steel products are in Ghent Zelzate, Dunkirk, Gijón, Fos -sur -Mer, Liege, Charleroi, Florange, Vitória (Brazil ), Bremen and ironworks city.