Two Indian steelmakers made two big ticket acquisitions. The first by ArcelorMittal, followed quickly by India’s largest private sector steelmaker Tata Steel. By 2014, the unwinding of assets and write-offs began as both deals turned sour. The global steel industry buffeted by global headwinds and affected severely by the economic downturn in Europe and the US, alongwith excess capacity in China which triggered dumping of cheap steel flooding the world market. The steel industry since then has been hammered by roiled with benchmark steel prices (hot rolled coils) which were quoting at $550-575 per tonne in 2007, now available in 2016 at about $380 per tonne. ArcelorMittal January 2006 – Lakshmi Niwas Mittal’s Mittal Steel announces $23 billion bid for Arcelor May 2006 – Sweetens bid by increasing the offer by 38 per cent to $32 billion June 2006 – Mittal Steel acquires Arcelor to emerge as largest steel company in the world ending one of the most publicized and controversial deals in corporate history. New company, ArcelorMittal, controls 10 per cent of global steel production 2011 – Splits off stainless steel division as a new company, Aperam 2012 – Low demand and excess capacity led it to idle 9 of 25 blast furnaces October 2012 – permanently shuts down two furnaces at Florange, France December 2012 – Writes down the goodwill in its European businesses by approximately $4.3 billion September 2014 – ArcelorMittal and its partner Gerdau Ameristeel sell off stake in Gallatin Steel to Nucor Corp for $770 million November 2015 – ArcelorMittal South Africa receives a bailout from government to prevent plant closures in two towns, including facility at Vanderbijlpark which employs 4,500 people March 2016 – Shuts down plant at Point Lisas, central Trinidad March 2016 – Decides to sell off LaPlace and Vinton Carbon facilities in US to affiliate of Black Diamond Capital Tata Steel October 2006 – Corus Group announces it has accepted an $8.1 billion offer from Tata SteelBSE -1.09 % at £4.55 per share Corus (18 MT)-Tata Steel (4.4 mt) combine to emerge as 5th largest global steel company Novembe 2006 – CSN launches a counter offer for Corus at £4.75. CSN has iron ore assets that would give Corus much-needed access to raw material. Tata improves offers to £5; CSN improves it to £5.15 December 2006 – Corus board accepts CSN offer UK’s Panel on takeovers and mergers announces closing date for bidding on 30 January 2007 January 30-31, 2007 – Panel on takeovers and mergers auctions Corus shares, with Tata outbidding CSN at £6.08 vs £6.03 January 2009 – Corus announces job cuts of 1,000 in Netherlands and 2,500 in UK due to downturn; mothballs production Late 2009 Mothballs Teeside Cast Products Plant September 2010 – Corus name changed to Tata Steel Europe November 2012 – 900 job losses in the UK due to restructuring proposals May 2013 – Announces a $1.6 billion goodwill impairment charge for loss of value of Tata Steel Europe October 2014 – Signs MoU with Klesch group for sale of Long Products business in Europe May 2015- Rs 6,500-crore goodwill impairment charge for value loss in Europe, Canada, Mozambique August 2015 – Discontinues talks with Swiss Klesch group for sale of long products Europe biz December 2015 – Tata Steel UK preliminary agreement with Greybull for European long products March 2016 – Decides to look for potential buyer for Tata Steel UK in whole or in parts.
Source: Economic TimesTale of two acquisitions: Mittal Steel’s acquisition of Arcelor and Tata Steel’s acquisition of Corus.
Industry: Steel 2016-03-31