Emerging market companies in spotlight after Mittal’s Arcelor deal

NEW DELHI, June 27, 2006 (AFP) – Takeovers of major western companies by emerging market players, particularly from India and China, will escalate as they chase growth outside their traditional home markets, analysts say. “It will be critically important to know these challengers well and to use that knowledge in making key business decisions. Decisions made without such insights certainly risk failure.” The 25.6 billion euro takeover of European steel maker Arcelor announced Sunday by Mittal Steel to create the world’s largest steel maker after a bitter five-month battle highlights the expected trend, according to Ravi Menon, director of investment banking at HSBC Securities in Mumbai.

In the case of Arcelor, the battle involved an Indian national whose company is listed in Rotterdam and New York and operates worldwide — but not India — a Russian billionaire who profited enormously from the break-up of the Soviet Union and several governments in Europe who had to contend with shareholder demands and angry workers.

“Obviously it is (the Mittal-Arcelor deal) a pride issue for all Indians. But the key message for Indian companies is that size is not a constraint,” Menon said
Indian-born Lakshmi Mittal, 55, now live