No longer us vs them

The battle to acquire Arcelor is now a corporate fight. India must see it that way and if it doesn’t, it will come across as Europe did when Laxmi Mittal first made his pitch. Then, European leaders, notably from France and Luxembourg, had been justifiably accused as being almost xenophobic in their opposition to Mittal’s hostile bid. There were uncharitable and ludicrous references to cultural differences, a thinly veiled anger at the prospect of a European company being bought over by an Indian-born businessman. Indians reacted — as they should have. Mittal received a lot of sympathy and some quasi-official support. But now, with Arcelor taking the fight with Mittal from government lobbying to corporate strategy through the deal with Russian steel major, Severstal, we must treat the issue as just another boardroom battle. Which is to say even if one agrees with Mittal’s argument that Arcelor is not giving its shareholders a fair deal, it doesn’t call for identifying Mittal’s cause with India’s.

This is crucial to remember because one of the rapidly changing features of India’s home-grown corporates is their ability to make offshore acquisitions. If Indian CEOs are perceived to be waving the flag every time they buy a foreign company, reactions will inevitably be hostile. Indeed, the best strategy to help Indian companies in this context is to allow them to operate as just another global corporate player. Tatas bought Tetley, a fairly iconic British tea major, without any fuss some years back — that should be the model we must wish for every Indian corporate acquisition abroad.

But this also means that in India we treat foreign buyers with equal non-discrimination. If a foreign company is buying an Indian corporate icon, it is not a national scandal, it is a business decision. India hasn’t always followed this — the BAT/ITC episode being a case in point. Of course, some European countries unlike, say, America or Britain, will continue to make a big fuss over overseas buyers. But that’s the point — we mustn’t be like Europeans.