Steel

Arcelor Mittal not yet reaping merger benefits

21 Feb 2007

The steel giant s 2006 results weren t bad a 4% decline in profits in the face of US market weakness. But there should be more to come. Mittal only purchased the Arcelor shares in August. So the synergies, and full market power, have just started to kick in. The steel giant s 2006 results weren t bad a 4% decline in profits in the face of US market weakness. But better news should be coming.

Another Indian metals mogul goes global

12 Feb 2007

The Birla Group s Hindalco is keeping up with the Tatas and Mittals by launching a $6bn swoop on Canadian aluminium roller Novelis. And in Tatalike fashion, the Birlas are paying a whopping price for the privilege. Even with its takeunder price, the returns look paltry. And in Tatalike fashion, the Birlas are paying a whopping price for the privilege. Even with its a tiny premium, the returns look paltry.

Didn’t Tata do India proud?

5 Feb 2007

Not necessarily. Ratan Tata may be a national hero after winning the £6.7bn auction for Corus seen as a symbol of the British Empire. But paying over the top for an old steel company in a mature economy may not be in India s, let alone shareholders interests.

Tata Steel faces up to Corus challenge

1 Feb 2007

The Indian steelmaker has done the easy part winning the auction for its larger rival. Now it has to make the highly leveraged deal work. A total rethink of operations comes first. Then there will be some new equity, and a hope that the steel cycle does not turn down too soon.

Tata falls victim to winner’s curse

31 Jan 2007

Access to Europe is a good justification. But if the Tata family is mainly trying to keep up with the Mittals, it s a high price to pay. The Indian steelmaker has stumped up £6.7bn to get Corus. It beat CSN by paying 34% more than its first bid in October.

Corus’ Varin could be boss of the year

31 Jan 2007

The Frenchmen signed up as chief executive of the AngloDutch steelmaker in 2003, when the shares were at 60p. It was just sold for 608p. The booming steel cycle helped, but Varin deserves credit for good management, and for insisting that Corus needed a mate. The Frenchman signed up as chief executive of the AngloDutch steelmaker in 2003, when the shares were at 60p. It was just sold for 608p.

Corus £5bn auction great for Corus shareholders

30 Jan 2007

The UKlisted steelmaker s fate will be decided in a nineround open auction. It s a rare and expensive way to end a takeover battle. Why so rare? Auctions too often come up with the wrong price either too high or too low. This time, count on too high.

Alcoa bondholders ignore gearing risks

23 Jan 2007

The US aluminium giant s $2bn bond offering was a blowout, luring investors eager for a corporate issue that protects against LBOs. But bond investors may still need protection from the issuer itself, which is catering to shareholders with a huge stock buyback.

ThyssenKrupp poison pill is indefensible

15 Jan 2007

Shareholders should vote down plans to give Thyssen the right to nominate 3 directors without putting them to a shareholder vote. This is a clear breach of corporate governance guidelines. If Thyssen has a plausible explanation, it is not letting on. Shareholders should reject plans to give the Krupp Foundation the right to nominate 3 directors without putting them to a shareholder vote.

CSN-Corus deal would be first corporate LBO in steel

15 Dec 2006

The Brazilian group is proposing to inject unprecedented amounts of debt into its AngloDutch rival twice the level in the Mittal Arcelor. True, this seems risky in a historically cyclical sector, but it s a sign of confidence in steel and benign conditions in capital markets. The Brazilian group plans to inject unprecedented amounts of debt into its AngloDutch rival twice the level in the Mittal Arcelor deal.

CSN in steel frenzy with £6bn Corus bid

11 Dec 2006

A few weeks ago, the AngloDutch steelmaker had two reluctant suitors. But now both the Indians and the Brazilians are hot on the company. In two steps, the price rose 13% over the weekend. This reflects Corus s scarcity value, and steel s new status as a glamour industry.

Steel becomes less cyclical

6 Dec 2006

Look at how Arcelor Mittal has been talking up prices and has now snapped up a E17bn credit facility on good terms. Mittal would be positive, but it does look less volatile. Owners are more profithungry, and demand growth has been unexpectedly strong.

CSN could find financing a £5bn Corus bid tricky

29 Nov 2006

The Brazilian steelmaker can t simply pile on debt. The Corus pension fund stands in the way. Besides, steel is a cyclical industry. Dutch corporate governance is another obstacle. An equity offer would help, but CSN s major shareholder might be reluctant.

Russian oligarchs flirt with US confrontation

20 Nov 2006

Evraz s $2.3bn purchase of Oregon Steel seems small fry in US politics. But the US trade deficit ensures more and larger sales to come. Globalisation isn t just putting Coke in Russian stomachs it is also creating Russian companies that dominate a range of basic industries.

CSN comes in with late £4.3bn ($8.1bn) Corus offer

17 Nov 2006

The Brazilian steelmaker is cautious. There's hardly any daylight between its approach and Tata's recommended bid. It's just 4% higher. That s not likely to be enough. Corus s two suitors may both be reluctant, but they will still have to fight for the company.

Arcelor Mittal forced to keep $5bn Dofasco

13 Nov 2006

The Canadian steelmaker was placed under the control of a Dutch foundation as part of Arcelor's defence against Mittal. The foundation is now refusing to allow Arcelor Mittal to sell Dofasco, as Mittal had planned. Still, that may ultimately suit Mittal well.

Severstal must be kicking itself over Arcelor

9 Nov 2006

The Russian steelmaker s shares have fallen 15% since the day its potential merger with Arcelor was announced. That deal failed. Arcelor s share price is up 28% since then. It looks the shareholders chose wisely and Severstal missed out on a good deal.

Severstal’s $13bn listing fails to set London alight

8 Nov 2006

But Alexey Mordashov, who still owns 80% of the company, gets what he wanted the currency to make more deals. The Russian steelmaker s GDR offering wasn t a knockout. It was smaller than first hoped, and the price was fair, not ambitious.

Mittal asserts control at Arcelor Mittal

6 Nov 2006

But it makes the carefully negotiated agreement with Arcelor at the time of the merger look hollow. The moral winners win. Lakshmi Mittal didn't wait long to install himself as CEO of the steelmaker, as was his right as biggest shareholder and guiding spirit.

Arcelor Mittal makes lowball E2.6bn Brazil offer

25 Oct 2006

The steelmaker must make an offer for Arcelor Brasil with equal conditions to the Arcelor acquisition. But equality is hard to define. Some minority holders were thinking in terms of share price premium and expecting E5bn. Mittal has gone for multiples. Expect a big fight.