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Book Review
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COLD STEEL
COLD STEEL
ABOUT THE AUTHORS
Tim Bouquet is an author, journalist, writer, editor, broadcaster and consultant with extensive
experience of editing and writing for leading national and international newspapers and
magazines. He writes for The Daily Telegraph Magazine, The Times Magazine, Esquire,
Prospect, Irish Times, SAGA magazine and Readers’ Digest. He also works as an editorial
consultant for major multinational companies.
Byron Ousey's is a managing director with Kreab Gavin Anderson, an international financial
public relations consultancy that specialises in advising governments and major corporations
on takeovers and mergers as well as crisis management. During the Mittal-Arcelor battle he
advised the Luxembourg government on their communications strategy.
Tim Bouquet and Byron Ousey discovered they had a common interest. Tim Bouquet was
hoping to be the first feature writer to profile Lakshmi Niwas Mittal, for an article for the
Telegraph Magazine. Byron Ousey happened to have a bird’s-eye view of the takeover battle
raging in Luxembourg. He was advising the Luxembourg government, which was the biggest
shareholder in Mittal’s target, Arcelor, on its communication strategy, but was not directly
involved with either Arcelor or Mittal Steel. ‘Together they are admirably qualified to guide
us through the myriad twist and turns of this compelling business saga and have produced and
enormously entertaining read’ – Christopher Silvester
INTRODUCTION AND SUMMARY
This book is an eminently readable and absorbing account of the behind the scene drama of
the takeover battle waged by Lakshmi Niwas Mittal against the management of Arcelor in his
bid to emerge as the “Emperor of Steel”. This book is not written by an insider but as we go
through the book it’s clear that the authors have extensively interviewed most of the insiders.
As we go through the book we will also realizes the amount of research the authors have
given into it. This book is written in a thriller novel style and everything that is said to be
actually happened. It is a book that captures your attention till end. The language used in this
book is also easy to understand.
This 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
with an amount of $4.84 billion. Initial Chapters of the book make clear the race between
Mittal Steel and Arcelor and tells people how important and intense is race for each one of us.
The starting of the book also mention about the egos of Arcelor CEO Guy Dolle and Mittal
Steels Lakshmi Mittal, their aspiration and how seriously both of them taking their battle.
After this, the book take us back to June 1950 to a place called Sadulpur in Rajasthan in India.
From here the authors describe the history of Lakshmi Mittal. That is from going to school,
moving to Calcutta, going to St. Xavier’s college, getting into family business, getting
married with Usha Dalmia, moving to EastJava in 1975, building a steel plant from the
scratch.
Mittal gained a degree in business and accounting from St. Xavier’s college and went into the
family business. He is the first Indian to build a Steel mill abroad, i.e. in Indonesia. At the age
of 29 a new member was added to the family, i.e. Lakshmi’s son (Aditya) was born. 1989 was
the year when Mittal Knew he hadn’t got enough time in front of him and the time where he
started to build more plants from scratch. He started acquiring loss making steel
manufacturing entities and was able to turn them around completely. Over the next 20 years,
Mittal acquire steel manufacturing plants in Trinidad, Mexico, Canada, Kazakhstan, Ukraine,
and the United States. From the point Mittal’s growth has started and it has been perfected
over the years. The entire history of Lakshmi MIttal is traced back from his birth to current
stage.
After the history of Lakshmi Mittal it takes back to the current event of Arcelor. Then the
authors start describing the struggle between Arcelor and Mittal Steel. It also mentions about
how Arcelor CEO Guy Dolle created a special secret team know as Project tiger, in order to
defend them from the attack of Mittal. The code name for Lakshmi Mittal was Mr. Moon and
for his Aditya was Adam. As per the defence plan the Arcelor acquire a steel company in
USA, but it couldn’t help Arcelor from the attack Mittal Steels. The authors have described in
detail about the strategy and the well oiled operation put by Mittal Steel.
Mittal told Blankfein, president and chief operating officer of the Goldman Sachs Group, one
of the largest global investment banks to explore strategic option and analyse the feasibility of
acquiring Arcelor. This was Mittals first business with Goldman Sachs Group but he already
had a good relation with Blankfein. They have mention in detail 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 the
obstacles were overcome. They also mention in detail about the various defense strategies
used by Arcelor. That is how they tried to find out a white knight and in the end found one in
SeverStal of Russia, 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 left with was the White Knight in SeverStal.
Perseverance, discipline, business acumen, patience, might, aggression – call anything and
you will find it here in fiercest hostile takeover in the history of global steel industry. The
book is an interesting and captivating read which will take you by surprise when you may
come to know that phone calls are prone to being tapped when you are in the game of hostile
takeover. The deal also involved political figures like prime minister, president, and finance
minister not only of France but also of India. The meetings were held in the wildest
destination from graveyard to airport lounge or on an isolated island which is beyond the
reach of media. Moreover, call it Project Olympus or Project Louise or Project Tiger, all of
them are associated to Arcelor. These were the names assigned by Mittals team, Arcelor
Team and the French government to save Arcelor from Mittals takeover. While Guy Dolle,
Ex CEO Arcelor was determined not to lose Arcelor to Mittals, Lakshmi Niwas Mittal was
determined to put on stake anything for Arcelor to become the biggest steel producer in the
world. However, reluctant might Guy had been but somewhere down his heart he was aware
that Mittal was better match than SeverStal who played the role of White Knight for Arcelor.
The authors also mention about the India Governments reaction to the protectionist approach
taken by French and Luxembourg Government. There was a situation where Arcelor CEO
Guy Dolle made an unfortunate comment about Mittal being an Indian and suddenly the
Europeans were accused of being racist. This spark that could have potentially resulted in
damaging the diplomatic relation was put out early. I really admire the way LNM agreed to
keep Luxembourg as the headquarters for the new company formed after merging with
Arcelor. Not only this, he agreed to dilute the stake in Mittal steels to avoid corporate
governance issues and also invited Guy Dolle on board who put down his offer. It also put an
end to racist remarks put on by Guy on Mittal and his offer referred to as monnaine de singe
literally means ‘monkey money’. It also means ‘funny money’ (tainted money) or ‘Monopoly
money’ (ridiculously large bot worthless sums).
Mittal’s 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. Lakshmi Mittal was a man
with a vision and man on a mission. He was supported by his able and intelligent son and
CEO Aditya Mittal. Aditya played an important role in this takeover battle and he interacted
with many key players. Everyone reported him as very intelligent and smart. This is a book
that tells the story of the Arcelor Mittal Steel takeover battle that resulted in ArcelorMittal. It
ranged for about 188 days which is the biggest takeover battle. The takeover made such an
impression on the steel industry that the mightiest steel producers in the world like Nippon
Steel and POSCO employed finance consultants and advisors to design a defense mechanism
to protect their company from relentless consolidation drive by the rajah of steel industry –
Lakshmi Niwas Mittal.
Cold Steel is a truly international thriller played at pace and mirroring the impact of
globalisation on one of the world's least known but most important industries. Unlike some
books which are merely 'based on fact', this is all true and the outcome of the battle was to
transform the landscape of the steel industry and bring a much needed victory for shareholder
democracy in mainland Europe. It is written as a thriller because that is what it was. Cold
Steel is a story of mounting jeopardy starring an international cast, many of them with exotic
names and backgrounds. They all had motive and opportunity and were in the right places at
the right and the wrong times. Some also got very rich in the process. In addition, the story is
not without a touch of the fantasy, the illogical and the unexpected juxtapositions that are the
true hallmarks of Surrealism.
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 very
important moment is the history of Steel industry. As for Lakshmi Mittal his story is far from
over. Although he is now the biggest steel producer in the world, he still only has 10 per cent.
His next goal is to be the first entrepreneur to produce 200 million tons a year.