An interview with the ArcelorMittal postmerger managers
Integrating 블랙토토 giants
The merger of two large, complementary companies presented an unusual challenge: sustaining growth as well as focusing on integration and cost savings.
Seraf De Smedt and Michel Van Hoey
February 2008
Few industrial mergers in recent years have captured the business world’s imagination quite like the combination of giants Arcelor and Mittal 블랙토토. The two were brought together in June 2006 to form the world’s biggest steel company, ArcelorMittal. It now has 320,000 employees in more than 60 countries and is a global leader in all its major customer markets, including automotive, construction, household appliances, and packaging. In 2007, the company earned revenues of more than $105 billion, while its steel production accounts for roughly 10 percent of the world’s output.
Vital statistics
Born July 1953
Married, with 3 children
Education
Graduated with degrees in engineering from École Polytechnique (1977) and civil engineering from École Nationale des Ponts et Chaussées (1979)
Alumnus of AVIRA (INSEAD)
Career highlights
ArcelorMittal (2007–present)
* Vice 블랙토토 and CEO of tubular products
Arcelor
* Executive vice 블랙토토 of substainable development (2005–06)
* Executive vice 블랙토토 of innovation research and development (2002–05)
Usinor
* Executive vice president and CEO of packaging 블랙토토 business (1998–2002)
Sollac (Usinor)
* Vice president of planning and strategy and head of sales packaging 블랙토토s (1998)
* Head of management control (1992–98)
Fast facts
Chairman of boards of ArcelorMittal Tubular Products holding and companies
The creation of ArcelorMittal was significant for several reasons, not least of which was the merger’s sheer scale. While unambiguously shaped and driven by the vision of President and CEO Lakshmi Mittal, the two parts were of roughly equal proportions, so in that sense the deal constituted a merger of equals. Both Mittal 블랙토토 and Arcelor were relatively young companies: the former resulted from a string of international acquisitions, while the latter was the product of three primarily European steel companies (Arbed, Aceralia, and Usinor). Unusually, the deal involved two corporations whose geographic and market strengths were remarkably complementary, though Mittal 블랙토토’s vertically integrated business model (it owned iron ore mines around the globe) contrasted with Arcelor’s greater downstream concentration.
Vital statistics
Born October 1958, in Newcastle, NSW, Australia
Married, with 2 children
Education
Graduated with BS in metallurgy in 1982 from University of Newcastle, NSW, Australia
Earned MBA in 1992 from Warwick Business School, UK
Career highlights
ArcelorMittal
* Executive vice president, member of management committee and head of strategy (2007–present)
* Executive vice 블랙토토, member of management committee and head of performance enhancement (2006–07)
Mittal 블랙토토 (2002–06)
* Director of Continuous Improvement
McKinsey & Company (1995–2002)
* Associate principal
Fast facts
Member of board of directors of ArcelorMittal Kryviy Rih, ArcelorMittal Temirtau JSC, ArcelorMittal Galati, and ArcelorMittal Liberia; formerly member of supervisory board of Mittal 블랙토토 Hamburg (2005–07)
Awarded Australasian Institute of Metals Prize (1980) in metallurgy at the University of Newcastle
Behind the headlines, the primary challenge of any industrial merger is to integrate the separate management teams, sales and product groups, operating assets, and procurement divisions. At ArcelorMittal, the responsibility for driving this effort fell to Bill Scotting and Jérôme Granboulan, two experienced steel men and veterans of earlier mergers at Mittal 블랙토토 and Arcelor, respectively. The London-based Scotting, an executive vice president responsible for strategy at the combined group, and Granboulan, CEO of ArcelorMittal’s tubular-products division headquartered in Rotterdam, recently met McKinsey associate principals Seraf De Smedt and Michel Van Hoey to analyze the lessons of the integration and to review the progress to date.
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