Indians hail Arcelor-Mittal merger

"Call it the victory of Indian 'cologne' over European perfume," The Economic Times, the country's leading financial daily, said in a headline, in a reference to Arcelor Chief Executive Guy Dolle who once described Mittal's steel as cheap eau de cologne compared to Arcelor's fine perfume.

Arcelor's board on Sunday approved the company's merger with Mittal Steel after its chairman and CEO, Indian-born Lakshmi Mittal, raised his bid to euro 26 billion ($ 33 billion).

The new company will control 10 percent of the global steel market and will be three times as big as its nearest rival, Japan's Nippon Steel.

The CNBC-TV18 television station called Mittal "the Sultan of Steel," and the Times of India displayed a picture of him wearing a gladiator's helmet.

The news of the merger was in the frontpage for most Indian newspapers - which would otherwise care little for a corporate merger in Europe.

Although born in India, Mittal has no operations in his native country. His company is headquartered in the Netherlands, with plants spread over 14 countries - from Trinidad and Tobago to Kazakhstan. The steel magnate lives in London.

But Mittal is a symbol of success here, and a source of inspiration for many Indian entrepreneurs with global ambitions.

Top Indian business and government officials were ecstatic.

"We are happy and proud that an Indian-born entrepreneur is the biggest steel maker in the world," Finance Minister P. Chidambaram told The Economic Times.

Commerce Minister Kamal Nath, who once described the hostile reaction by officials from France and Luxembourg to Mittal's bid for Arcelor as "xenophobia," told reporters he was glad "some countries have realized that globalization is not a one-way street."

Nath said that Mittal's bid demonstrated the "intellectual ability" of Indians and people of Indian origin.

"There is a new economic architecture in India and countries, which had a different mindset, now have to face it that in the new global architecture, India has to be a major player," said Nath, who is currently on a tour to the United States.

Associated Chambers of Commerce and Industry of India (ASSOCHAM) president, Anil Agarwal, in an interview to Asia News International (ANI) said that the Indian industry and the ASSOCHAM in particular was happy with the Mittal-Arcelor deal.

"The Indian Industry, the Indians in general and the Assocham specifically, are happy that the deal has come through and now the Arcelor-Mittal will become world's largest steel company," said Agarwal.

"Mittal Steel will have 10 percent of the total production in the world. They will have some three lakh employees the world over. With this merger and acquisition, Mittal Steel will become 'the steel-maker of the world’," Agarwal added.

He said the deal has given rise to a lot of aspirations the world over.

"It is looking bright and there is a lot of work to do. This deal has given rise to a lot of aspirations the world over, as the world was watching this deal for a while now and there will be a lot of stakes on this now," Agarwal said.

"We are proud that Mittal's an Indian who's done well," said Jagdish Khattar, managing director, Maruti Udyog Ltd. "As there are no Indian companies like Mittal Steel, we may not see such huge deals being struck by them. But Indian companies are acquiring firms abroad and this trend will continue."

"This deal is a salute to Indian entrepreneurship. It will give confidence to Indian businesses to create organizations that are worldwide leaders in their segments," echoed Sunil Mittal, CMD, Bharti Group. "One hopes that this deal will pave the way for India Inc. to think big and look at major international acquisitions."

"Mittal's success clearly indicates that in these days of globalization, in spite of unjustified hurdles, justice and merit prevail," said Rahul Bajaj, chairman, Bajaj Auto.

"It is a very proud moment for India," added Adi Godrej, Godrej Group. "Mittal was already the biggest steel player, and now he is by far the biggest. I am hopeful that many Indian entrepreneurs will go global with bigger plans like this."

Mittal Steel, meanwhile, has already moved ahead with its plans in India. It has identified six locations in Jharkhand for its 12 million tonne greenfield project and will shortlist one of them within the two months. The shortlisted locations are Turpa, Govindpur, Muri, Serailkela, Santhal Pargana and North of Ghatsila.

"India's GDP is growing at 8 percent every year. In step, the country's steel demand is also estimated to go up significantly. Alongwith China, India thus forms an essential part of our growth plans," Mittal had told Economic Times in October just after signing the MoU with the Jharkhand government.

Growth projections apart, much of Mittal Steel's India focus also stems from a more fundamental business need — access to high quality raw material reserves of iron ore and coal.

In the memorandum of understanding (MoU) signed with the Jharkhand government, Mittal Steel has pledged that it would make a huge investment of $ 9 billion besides providing both direct and indirect employment to hundreds of people.

According to Mr. Sanak Mishra, chief executive, Mittal Steel Jharkhand Pvt. Ltd., the company has fulfilled its initial requirement enshrined in the MoU by opening a office at Ranchi and christening the company as Mittal Steel Jharkhand Pvt. Ltd. for its Indian operations.