Book Review: Cold Steel
Just finished reading the tale of Mittal Steel's takeover of Arcelor in 2006, as told in the book "Cold Steel" written by Tim Bouquet and Byron Ousey. The book describes the transaction through the "eyes" and activities of the major players in the deal (both on the Mittal and Arcelor sides), a method popularised by the granddaddy of business epics: "Barbarians At the Gate" (a narrative on the groundbreaking (and ultimately disastrous) buyout of RJR Nabisco by KKR, which was published in the late 1980s by two WSJ Journalists).
The book gives a good background on Lakshmi Mittal's rise from operating Steel Mills in his native India and then Indonesia, to becoming the undisputed global King of Steel. The book vividly describes the various behind the scenes moves and machinations of the two "warring parties" (as represented by Guy Dolle, CEO of Arcelor and Lakshmi Mittal of Mittal Steel). The book was definitely written with the casual follower of finance and business in mind, so hard core finance "junkies" may be a little disappointed with the authors' refusal to dig deep into the mechanisms of valuations and/or deal structuring.
On the whole, I enjoyed reading the book and I learnt two (2) key lessons about the modern day international business environment. The first is: the amazing rise of globalisation: although Lakshmi Mittal was born and raised in India, his business empire spanned the whole globe (from former Soviet Republics, to Trinidad & Tobago and the United States) with no significant presence in his native country of India. At the time of the deal he was resident in London, while his business' head office was located in the Netherlands, while his first son (& heir apparent) graduated from an American University.
The second (somewhat contradictory) lesson I got from the book is the big role nationalism, ethnic pride and local politics continue to play in this fast moving globalised business world of the 21st Century. To get the deal done, Mittal had to appeal to, and appease, various politicians in Arcelor's operating countries (i.e. France, Luxembourg and Spain) even though Arcelor was at that time a publicly listed company with a diverse shareholder base who shoul Tacit racial slurs and insults were hurled at him from time to time, with Mittal Steel being severally referred to as: "a bunch of Indians", "that Indian Company" even though it was registered in Europe and did little or no business in India. Not to be outdone, the Indian government filed a complaint and its Prime Minister came out strongly in support of Mittal's bid (even threatening retaliations) even though Mittal Steel was technically an European company with practically no business operations in India.
The book is really good and I will recommend it to anyone interested in international business, finance or just desirous of a good read.
