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Mittal to hunt for acquisition in India, China
By agencies
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Wednesday, 01 March 2006, 20:30 IST
LONDON: Mittal Steel's hunt for acquisitions will shift to China and India once the company has pulled off its planned $22.1 billion takeover of Arcelor, its French rival, company's CFO, Aditya Mittal said.
Mittal said the world's biggest steel maker would have enough assets in Europe and North America once it completes the takeover. After purchasing Arcelor, we will have a commanding position in Europe and North America, so the focus will be on China and India, with a few small bolt-on acquisitions elsewhere, Mittal said.
Combining Arcelor, Mittal would lay down the gauntlet to other steel groups, such as Nippon Steel, of Japan and U.S. Steel, to carry on consolidating. At present, the top five world producers make only 20 percent of all the steel used worldwide, much less than the comparative figures in the glass and aluminium industries.
If Mittal Steel succeeds in a bid for Arcelor, the leading producers will have a 23 percent share of the market. However, Mittal Steel believes that in five years the top half-dozen or so producers will have between 30 and 40 percent of the market.
He said, For every dollar we spend on research and development, we can leverage it over 130 million tones of production. Over time we will take more market share. Our competitors have a choice: they can remain one third of our size or join in the consolidation.