Writing Style

This book provides a detailed insider account of the unsolicited/hostile takeover bid of Arcelor
by Mittal Steel. Though this book in not written by an insider to the whole takeover transaction,
the authors claim to have extensively interviewed most of the insiders. As one reads the books,
one realizes that the amount of research that has gone into the book and the kind of details that
have been described it is not possible to write such things unless either one is letting the
imagination run wild or one has great assistance from people(s) who were on the inside.

The book is written in a thriller novel style and as one reads the book, it is difficult not to observe
that it feels like one is reading a Robert Ludlum novel. Only this is no novel and everything that
is said actually happened. It is a book that captures your attentions to the end; written at an
engaging pace it is difficult to put the book down. I would recommend that you start reading this
on a Friday afternoon. I did. I was able to finish by Sunday late evening.

The language used in the book is easy to understand. For any person who has basic theoretical
understanding of Mergers and Acquisitions (M&As) and terms like White Knight, While Squire,
Poison Pill etc. would be able to thoroughly enjoy the book. For any person who has no
understanding of these things need not worry because as you would read the understanding
would be clear and there would be no need to refer to any special sources to understand technical
things or M&As.

Contents

The book starts with Mittal Steels successful bidding for Ukrainian steel company Kryvorizstal
in 2004. Arcelor and Mittal Steel both were in the race and Mittal won the bid. Initial chapters of
the book make clear the race between Mittal Steel and Arcelor how intense and important the
race is for all the people. The egos of Arcelor CEO Guy Dolle and Mittal Steels Lakhsmi Mittal,
their aspirations and how seriously both of these commanders are taking the battle are made clear
in the starting of the book.

After setting the clear the basic things, the book takes us back to June of 1950 to a place called
Sadulpur in Rajasthan in India. From there the authors describe the history of Lakshmi Mittal
going to school, moving to Calcutta, going to college, getting into family business, getting
married, moving to East Java in 1975, building a steel plant from the scratch. 1977 was the year
when Aditya (Lakshmis son) was born. At the age of 39, Mittal knew that he did not have
enough time in front of him to build many more plants from scratch. From here started the
growth formula Mittal has perfected over the years acquiring loss making steel manufacturing
entities and turning them around completely. The entire history of Lakshmi Mittal is traced back
from his birth to current stage and it is done in an incredible 10 or so pages returning the story
immediately back to the current events of Arcelor.

The authors then start describing the tussle between Arcelor and Mittal Steel how a special
secret team was created by Guy Dolle to envision circumstances where they might be under
attack from Mittal and plan out defences in advance One of the plans was to acquire a steel
company in USA, which was infact acquired by Arcelor, but that could not save it from coming
under and attack.

The authors have described in detail the strategy and the well oiled operation put in motion by
Mittal. How the whole strategy was made, the amount of planning and discussion that went into
the takeover strategy, the scores of issues that were identified by the team of investment bankers
and lawyers, and how those obstacles were over come.

Also explained in great detail are the various defence strategies used by Arcelor. How they tried
desperately to find out a White Knight and in the end indeed found one in SeverStal of Russia
(and then how Mittal outsmarted the Russians), the various poison pills, a special protectionist
takeover law put on table by Luxembourg govt. but which was never passed, the political charm
offensive of Lakshmi Mittal and how in the end every single defence strategy that was put in
place by Arcelor failed and the only option they were left with was the While Knight in SeveStal.

Also explained are the Indian Governments reaction to the protectionist approach taken by
French and Luxembourg Governments. Guy Dolle made a rather unfortunate comment about
Mittal being an Indian and suddenly the Europeans were accused of being racist. This spark that
could have potentially resulted greatly damaging the Indian-French and Indian-Luxembourg
diplomatic relations, was put out early. But the xenophobic attitudes of the French and
Luxembourgise peoples have been captured in detail.
Europe's identity has been partly forged in the crucible of steel. In 1951 six nations founded the
European Coal and Steel Community to pool their industrial resources and proclaim a new era of
international co-operation after decades of war.

Over the next half century, this economic community developed into the European Union and
several of the continent's steel firms merged to form the world's most technologically advanced
steel group, Arcelor. With its consensual style of management and labor relations, the
Luxembourg-based company appeared a model of European industrial strength, scientific
prowess, and social market democracy.

But in 2006 this cozy stakeholder capitalism was shattered when Lakshmi Mittal, a
swashbuckling steel magnate from India, launched a massive hostile takeover bid. Here was a
bold entrepreneur from the emerging sub-continent taking a tilt at one of Europe's most
established companies. It was, the authors of *Cold Steel* contend, the takeover that defined an
era.

The corporate battle that raged over the next few months was rich in passion, intrigue and drama.
A powerful amalgam of charm and ruthlessness, Mittal was intent on dominating the fragmented
global steel industry. As the majority owner of a listed business, he was able to move with deadly
speed and daring. Over the previous 15 years this "Carnegie of Calcutta" had spent $15bn
acquiring 47 companies. But the capture of Arcelor would be his most stunning triumph, creating
a giant group with a market value of $46bn controlling almost 10 per cent of global steel
production and employing about 320,000 people.

Arcelor was determined to resist. The Luxembourg and French governments bristled at the idea
of an outsider grabbing so symbolic an industrial jewel. The company's bruising defense was
masterminded by Guy Dolle, a brilliant but acerbic steel man with a fatal talent for making
inappropriate remarks.

Unwisely, he referred to Mittal as a company of Indians offering *monnaie de singe* (literally

monkey's money), which has nastier overtones in English than in the original French. Mittal's
public relations advisers leapt on the translated comment, fanning a furore in India that damaged
Arcelor's reputation.

The authors take some liberties. They reconstruct private conversations verbatim that could not
possibly have been recorded and -- at times -- their fast-paced narrative lapses into overwrought
prose. They also pay more attention to the battle between the two sides' advisers than the
financial and industrial calculations behind the deal.

Given the background of the two authors, that is perhaps unsurprising. Tim Bouquet, a features
journalist, teaches creative writing. Byron Ousey works for a financial public relations company
that advised the Luxembourg government. Their collaboration has produced a compelling tale.
Too few page-turning books are written on the high drama and low cunning of business and
finance. Cold Steel is a welcome addition.

It is said that history is written by the victors. But contemporary history is also shaped by those
who bother to talk to the historians. Both the Mittal camp and Dolle co-operated with this book.
Two other key corporate players, Severstal and ThyssenKrupp, companies heavily involved in
the maneuvering surrounding the bid, refused to engage. In spite of the authors' commendable
even-handedness, the book is somewhat lopsided as a result.

Yet, as the authors make clear, almost everyone gained from Mittal's revised offer, which won
the unanimous backing of Arcelor's board. Arcelor's shareholders benefited from a huge rise in
the value of their shares. Mittal ended up paying less than its own internal valuations suggested
Arcelor was worth. The tiny Luxembourg state received 400m euros from selling part of its stake
in Arcelor. Yet it also retained a 3 per cent stake in the enlarged group and the headquarters of
ArcelorMittal. The 13 banks that advised both sides of the deal collected $200m in fees. Mittal
has now been warmly embraced by Europe's corporate -- and political -- establishment.

The only clear loser was Dolle, who turned down Mittal's gracious offer to remain at the
company. There was a certain tragic nobility in Dolle's stubbornness.
But as John Plender, an FT columnist, wrote at the time, the bid also raised nagging questions
about how companies are best owned and run. In particular, the ability of hedge funds to
"borrow" shares and exercise their voting rights is an area ripe for abuse. Such practices should
be included in the regulatory debate that is now beginning as the reckless excesses of financial
market capitalism are so painfully unwound.

Conclusion

Mittals vision, one he kept on repeating throughout the battle for Arcelor was that state run steel
companies had no place in the modern world. Steel would have to go global. According to the
authors the reason Mittal was so successful in turning around loss making manufacturing units
was that he was the only person who could actually work the control panel of a blast furnace
himself. He knew his business inside out. This view was endorsed by an article in Forbes
magazines June 2009 edition.

Lakshmi Mittal was a man with a vision and man on a mission. He was supported by his able and
intelligent son and CFO Aditya Mittal. Aditya played an important role in this takeover battle and
he interacted with a great many key players. Everyone reported of him as being very intelligent
and smart. Only Guy Dolle could not come to like Aditya always referring to Aditya as the son.
These are the bits of details that come to light the emotional part of this intense takeover battle.

This is a book that tells the story of the Arcelor Mittal Steel takeover battle that resulted in
ArcelorMittal. Any person who is fond of warfare and strategy and has done a bit of reading on
these subjects will be immediately able to spot the kind of offensive and defensive strategies
followed by both sides to the battle. Any person related to or interested in the field of M&As
would be delighted to see big warriors of this game engaged in the biggest takeover battle that
raged for about 188 days. Any person who just wants to know what happened would be amazed
to see the amount of strategy and effort put in by all the people at both sides the bankers, the
lawyers, the communications and PR people, the strategists, the government representatives, the
hedge funds people, the investors, the shareholders, the stakeholders and scores of others.

It is after a while I have read such an amazing account of a real life event which, in my opinion,
was a very important moment in the history of steel industry in specific and corporate history in
general. It was a very important historical event from any given vantage point and this book tells
the insiders story of it.