Tenacity and a potent public relations effort wins the prize

Lakshmi Mittal has apparently succeeded in his quest to merge with Arcelor. He comes out a huge winner even though: a) his expected ownership share of the merged company, at about 43%, is probably far less than he was originally expecting; and b) the Board of Directors will include a majority of members not selected by him. His initial title will be the President of Arcelor Mittal. When Joseph Kinsch, the Chairman of Arcelor’s Board of Directors and the proposed new Chairman of Arcelor Mittal, retires in several years, Lakshmi will be in line to become the Chairman.

Granted the merger is finalized, it would be an exceptional development for Lakshmi Mittal and members of his family. Not only will they own some 43% of the world’s largest steel company; it will be positioned to be a strong performer in the future. The common stock market value of Arcelor Mittal, based on share prices as of June 28, 2006 is $41 billion.

Lakshmi Mittal, for sure, is the steel industry executive who has most impacted the strategic thinking of his competitors in the past few years. Now, given the formation of Arcelor Mittal, he might be called the “king” of the global steel industry. (Note: The majority of successful companies in most industries have kings. The most effective kings, in WSD’s opinion, are those that have high integrity, love their business, work many hours, are born with a great competitive spirit, absorb sizable detail, think conceptually, enjoy the never-ending confrontations that come with the job, and empower the people working for them.)

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