Mittal/Arcelor "Dominant on All Markets"
We often tell our students that investment bankers and corporate staff should be careful when releasing statements to the press about their dealings. Hereafter an excerpt from a statement by Exane BNP Paribas, the bank advising Mittal in its proposed takeover of Arcelor (from le Monde dated 15 February 2006):
Mittal Steel pourrait "d'un coup, combler toutes ses lacunes" [...] . "Le nouveau groupe serait réellement mondial, avec des positions dominantes sur tous les marchés et tous les produits" (emphasis added).
or, in english (free translation) "Mittal would become a real worldwide group, with dominant positions on all markets and products"
... the kind of statement you'd abstain from prior to notifying a transaction to a competition authority.
The comment is really accurate concerning what should or not be written.
Just a little precision: Exane BNP ist not the banker of Mittal (which is supported in France by the competitor Société Générale, Le Monde, 14 février, Les Banques d'affaire de Mittal Steel estiment avoir le soutien de la City).
As you wrote, BNP Paribas is the banker of Arcelor, and Exane BNP is only the stockmarket specialised company of the BNP Group.
Maybe the BNP is playing a double game to win on both sides:
- Exane BNP shows how independant it is from BNP Paribas in saying how great the operation is.
- by the same time, it gives information making the operation as difficult as possible.
If the operation is a success, for sure the Exane BNP will have taken measures to profit from it.
If it is a fiasco, BNP Paribas keeps a big client, Arcelor.
How a dangerous statement with regard to competition law, could be a wining business strategy!
Posted by: Daniel Crevel-Sander | February 18, 2006 at 04:30 PM
Please read: "As the article (of Le Monde) wrote BNP Paribas is the banker of Arcelor".
Excuse this typing error!
Posted by: Daniel Crevel-Sander | February 18, 2006 at 04:37 PM
What is LN Mittal's biggest weakness? The biggest weekpoint is that he does not belong to any country. He does business in Europe but they do not consider him as one of them. Although he is Indian Citizen but so far did not do much for India. He does not employ even 1000 people in India and also ONGC/MIttal combination has not been very successful so far. Arcelor knows the same and they are using "Patriotism" as the weapon now. Now the war is at the country level and no country is with LN Mittal now. And the proof is that in the New Delhi joint statement Chirac made a statement on Mittal while Manmohan Singh said that he did not even discussed the same with Chirac, when Mittal was expecting him to discuss. Although issue was not discussed between both the leaders still Chirac made a comment on Mittal because he knows that Mittal is Indian. Manmohan Singh did not discussed because he knows that Mittal Steels in not an Indian company and does not has much base in India so far. Manmohan Singh can not put rest of the India on stake just because of one Indian family. Mittal might be having big plans for India in future but frankly speaking he is a business man and will not invest in India just because he is Indian.
Posted by: Vaibhav Rastogi | February 21, 2006 at 03:15 AM
Adding few more lines to my previous comment. I am not saying that LN Mittal is not patrotic or Arcelor's starategy of using "Patriotism" as a tool to defend themselves is correct. The LN Mittal's weakness shows that he is a global person and it is fully focused to his business which will ultimately give profit to the shareholders.
Posted by: Vaibhav Rastogi | February 21, 2006 at 03:27 AM
wite more abt this tycoon for gd's sake!!!!!!!!!!
y is evry1 s cnsumed with the arcelo deal like he didn't exist befre this!!!!!!!!1
Posted by: riti | July 02, 2006 at 08:34 AM