ArcelorMittal’s (MT) subsidiary ArcelorMittal India Private Limited has made a bid to acquire troubled Indian steelmaker Essar Steel. According to Lakshmi Mittal, ArcelorMittal’s CEO, “Essar provides a compelling opportunity for ArcelorMittal to enter the high growth Indian steel market.”
However, this isn’t the first time that ArcelorMittal has planned a foray into India (INDA). In the last decade, there have been reports of ArcelorMittal setting up multibillion-dollar projects in India. However, none of these megaprojects have seen the light of the day.
Years ago, ArcelorMittal acquired a stake in an Indian steelmaker called Uttam Galva Steel. However, after nine years, the company exited its investments at a massive loss, according to the Indian media. The exit was planned to enable ArcelorMittal to bid for Essar Steel under Indian laws.
Although ArcelorMittal has also announced a joint venture with another state-owned Indian steelmaker to manufacture automotive-grade steel, the company’s Indian operations are minuscule at best given its scale of operations. The Essar Steel acquisition, if it goes through, could provide a sizeable platform on which ArcelorMittal could enhance its Indian operations. However, Mittal hasn’t had much luck in the country so far.
In the next and final article, we’ll see how the acquisitions announced by ArcelorMittal could benefit investors.