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arcelor mittal takeover

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Introduction

ARCELOR - MITTAL IN THIS COURSEWORK I AM GOING TO INVESTIGATE TO WHAT EXTENT SHAREHOLDERS ARE NEGATIVELY AFFECTED BY THE MERGER BETWEEN MITTAL AND ARCELOR. I WILL BASE ALL OF MY STATEMENTS ON EVIDENCE THAT I HAVE FOUND. THIS WILL BE MAINLY SECONDARY EVIDENCE. THE ARCELOR GROUP WERE THE WORLD'S LARGEST STEEL MANUFACTURERS. THEY PRODUCE 42.9 MILLION TONS OF STEEL A YEAR WITH A TURNOVER OF $28.1BILLION. THEY OPERATE IN OVER 16 DIFFERENT COUNTRIES WHILE EMPLOYING 224,000 EMPLOYEES. THE MITTAL GROUP ARE ANOTHER ONE OF THE LARGEST STEEL MANUFACTURERS IN THE WORLD. THEY PRODUCE 32.9 MILLION TONS OF STEEL A YEAR WITH A TURNOVER OF � 32.6 BILLION. THEY OPERATE IN OVER 60 COUNTRIES WHILE EMPLOYING 110,000 EMPLOYEES. A TAKEOVER IS THE ACQUISITION OF ONE BUSINESS OR COMPANY BY ANOTHER. ...read more.

Middle

THESE COULD INCLUDE: > EMPLOYEES, BECAUSE THEY COULD LOSE THEIR JOB DUE TO THE MERGER > LOCAL COMMUNITIES, BECAUSE THEIR SURROUNDINGS COULD BE AFFECTED IF THE COMPANY CHOOSES TO ALTER THE SITES. > SHAREHOLDERS, BECAUSE THE EFFECT OF THE COMPANIES SUCCESS OR FAILURE WILL EFFECT THE SHARE PRICES > INVESTORS, IT THE COMPANY GOES BUST THE INVESTORS COULD LOSE MONEY OR GET LESS RETURN FROM THEIR INVESTMENT > GOVERNMENT, IF THE COMPANY CHOOSES TO REMOVE LARGE PLANTS FROM A COUNTRY, IT COULD CAUSE UNEMPLOYMENT > SUPPLIERS, THE SUCCESS OR FAILURE OF THE BUSINESS COULD AFFECT THE AMOUNT OF SUPPLIES ORDERED. > PUBLIC AT LARGE (GLOBAL COMMUNITY), IF THE COMPANY EXPANDS IT COULD ALTER THE ENVIRONMENT DUE TO MORE RESOURCES NEEDED > COMPETITORS, WEITHER THE COMPANY BECOMES SUCCESSFUL OR A FAILURE IT COULD MAKE IT HARDER FOR COMPETITORS TO TRADE. ...read more.

Conclusion

From the evidence I have collected I can come to the conclusion that both Arcelor and Mittal merged due to main reasons. These are: > Economies of scale: more output over a bigger company, cheaper costs and more profit. > Managerial economies of scale: cuts down the cost of 2 head offices and management teams > Financial economies of scale: easier to get a loan from the bank > Leadership position in high-end segments in North America, with strong R&D capabilities; > Operations in high-growth economies of Asia and South America with low-cost, profitable assets and local operations expertise in numerous emerging markets; > Access to raw materials and upstream integration > Well-balanced portfolio exposed to the whole spectrum of steel products ?? ?? ?? ?? By Rishi Desai 11D2 ...read more.

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