Mittal Steel

Lakshmi Mittal and the Growth of Mittal Steel

Case Study

Mittal Steel Company N.V., which is now a part of ArcelorMittal, was one of the world's largest steel producers by volume. It was formed initially when Ispat International N.V. got acquisition of LNM Holdings N.V. and merged them with International Steel Group Inc. in the year 2004. The company decided to acquire Arcelor, and the name was kept to be ArcelorMittal. Now, L.N. Mittal is the world's largest steel maker (Hill, 2011).

Forces that drove Mittal Steel to start expanding across national borders

There were many factors which caused Mittal Steel to start expanding its business across the national borders. In the era of 1970s, the company was facing problems due to lack of opportunities for growth in India. The restrictions were due to the regulations imposed that hindered expansion of industries. Other than that, Mittal Steel also had to face fierce competition from Tata Steel which was a national rival, and from SAIL. In 1975 company decided to set up a plant abroad, in Indonesia. This was because the company felt that the best potential of growth of the company lied in setting up operations outside India (Hill, 2011).

Mittal Steel's expansion into different countries through acquisitions and mergers

After setting up the plant in Indonesia, Mittal quickly found ways to cut cost during the production of steel. He realized that purchasing the raw materials allowed him to save money and turn it into profits. He also felt that purchasing small plants that were about to collapse was beneficial, as they could be renovated to become part of the company. He used this technique to grow the company by means of acquisition (Keillor & Kannan, 2011).

When mergers and acquisitions are utilized as a means to grow in order to create a leading steel company ...