Mittal Steel’s 2006 takeover of Arcelor

by Kajal Mehta    May 25, 2008

A bond of $3bn (£1.5bn; 1.9bn euros) will be issued by Steelmaker Arcelor Mittal. Because its long term debt has risen to more than $25bn so it will use the funds from selling the bonds to reduce its long-term debt.
The world’s largest steelmaker by volume, the firm was created by Mittal Steel’s 2006 takeover of Arcelor. The firm recently reported a 5% rise in first-quarter profits, as despite growing economic uncertainties there was still strong global demand for steel.
Arcelor Mittal’s shares fell nearly 2% in early trading in Paris after the bond issue was announced. The firm’s debt has risen by about $3bn to $25bn so far this year, pushed up by the cost of recent share buybacks, acquisitions and the impact of foreign exchange rates. For future growth Arcelor Mittal is targeting emerging markets by signing deals in Argentina. Brazil, China, Egypt and Venezuela. The group, led by chief executive Lakshmi Mittal, employs 310,000 staff.
 

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