Consolidation means sustainability: LN Mittal
06 July 2006
Laxmi Niwas Mittal has won the long drawn battle for Arcelor. He eventually convinced the Arcelor board and shareholders to vote in his favour to create the world's largest steel company. But what does this victory mean for Mittal Steel, the global steel industry and for himself. Laxmi Niwas Mittal, chairman and CEO of Mittal Steel, says in an exclusive interview with CNBC-TV18, that the steel industry needs consolidation as consolidation means sustainability.
On top of the world in all sorts of ways?
It is a very fantastic moment. I am very proud of what we have been able to achieve. It has been a long journey. It started in January, took lot of hurdles, problems and frustrations.
Do you think there was a lot of justice here? Severstal was brought in to keep you outů in fact it might have ended up delivering it to you?
There have been a lot of hurdles created to frustrate our transaction. But I am very pleased that shareholders got up on their feet and mobilised themselves. They asked the Arcelor board to review and revisit their decisions, and they wanted to be given a fair chance as shareholders. The Severstal transaction was not very clear to shareholders; it was kind of an opaque situation. They did not understand the value, they never got to know the industrial logic and industrial rationale. We have been working on this transaction for so many months, explaining to all the shareholders and stakeholders about the industrial logic and rationale behind this transaction. Suddenly they saw a company, Severstal, without proper, full disclosures. So they got upon their feet and they protested. I think it made a big difference.
But the shareholders were thinking one way, the Arcelor management was going another way. What was the reason for the disconnect? Was it the personal attitude issue?
I think the whole process began with emotions and there has been lot of emotional outbursts with the process.
Emotional outburst against you?
I guess Mittal Steel, obviously.
I think Arcelor was not expecting an unsolicited bid on the company. For them it was the price and they never looked objectively into the whole thing. It became more of a subjective decision and of emotions.