Laxmi Mittal’s Arcelor takeover bid: One row, three continents

Mittal’s bid deserved a ‘‘reaction at least as hostile’’.

As Arcelor’s listings are mainly in Luxembourg, but also France, Belgium and Spain, the tone of the fight appears to be more along the lines of protecting a European way of life against an Eastern approach. The race overtones appeared when certain French politicians referred to him as an ‘‘Indian predator’’.

And one of the sticky points raised by Arcelor: the demand for extra voting rights for the Mittal family. His wife is on the board and his son, Aditya, is the company’s chief financial officer. Mittal’s reply: ‘‘Husband and wife talk at the dinner table and the children hear everything…That’s why so many successful businesses are family-run ones.’’

When tensions appeared to have got out of hand, French Finance Minister Thierry Breton stepped in to defuse the row, describing Mittal’s move as ‘‘normal business life’’. But an underlying political agenda could be the cause behind the discreet downplaying of the row, for President Chirac is scheduled to visit India within a couple of weeks.

Events, clearly, have not gone according to how Mr Mittal envisaged them when he announced his $24 billion takeover bid a week ago. With his company, the world’s largest steel producer, making 56.7 million tonnes per year, Mittal said that combining with Arcelor (world number two at 47 million tonnes) would make the new merged company bigger than the next three producers put together.

The latest episode in the saga indicates that a Chinese collaboration is on the cards to change the direction of the negotiations. In a bid to fend off the threat from Mittal Steel, Arcelor is busily wrapping up the final stage discussions with the Chinese Laiwu Steel company.