ArcelorMittal S.A., a Luxembourg city-based steel manufacturing company, entered into an agreement to takeover Odisha Slurry Pipeline Infrastructure for $ 327 million on December 3, 2019.
Arcelor has already made a deal for acquiring Essar Steel Indian limited, an Indian steel producer based at Hariza, Gujarat. Lakshmi Niwas Mittal, the CEO of Arcelor, announced that a new headquarter will be established in Mumbai, India.
Arcelor’s Acquires Another Company
On November 15, 2019, the Supreme Court of India approved Arcelor’s bid of $ 5.8 billion for the acquiring of the said company. The deal will be completed before the end of 2019.
According to Arijit Basu, the Managing Director of State Bank of India, “money should come in soon. We expect it will come by December-end.” After the completion of the transaction, ArcelorMittal and Nippon Steel Corporation, Japan’s largest steel manufacturer, will operate Essar as a joint venture.
Arcelor made an addition deal of acquiring Odisha Slurry Pipeline yesterday. Taking over the pipeline company will be an advantage for Arcelor expansion as the pipeline company has been an important source for supplying iron ore and other raw materials to Essar Steel’s faculty at Hariza.
Defeating the rival bidder, Thriveni Earthmovers, an executive of Arcelor commented, “This pipeline is made for the Essar Steel plant. Nobody else has any use for it, so in a way, it is surprising that Thriveni has also submitted a bid.”
Mittal’s offer was a huge relief for the pipeline company, as it owes $ 4.6 billion to banks. The deal of Mittal’s acquisition covers the principal and the interest of the existing financial debts of the pipeline company.
Recruiting New Executives from Private Firms
Regarding the selection of the new executives, Arcelor officials commented, “It is work in progress and the company is finalizing names for the CXO positions. The thrust is higher on getting candidates from private sector firms competing in this sector.”
Over many years, Mittal had been hiring his company’s board of executive from the state-owned Steel Authority of India (SAIL) for various operations across many cities including New Delhi, Gurgaon, and Kolkata. However, he plans to hire more people from the private firms who have experience in the industry.
With help from a management consulting firm, Korn Ferry, Arcelor has been able to approach some executives from rival companies including Tata Steel and JSW Steel. According to one of the company’s executives, “The hiring is for some key positions in functions such as operations, finance, sales and marketing.”
Choosing Mumbai A Strategic Location
The company officials revealed that choosing Mumbai as the new headquarter of the company was because of its close proximity to Essar’s steel plant, Hazira, which is considered to be one of the biggest single-location plants in the world that produces flat steel.
Another executive explained, “The move for the new office will become more visible in the next two-to-three weeks once the banks receive payment and ArcelorMittal is handed the controls.”
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