Mittal Acquires Arcelor

Jesus Saracho Aguirre

International Student

Mergers and Acquisitions (FN 311) Prof. Ang Ser Keng

Mergers and Acquisitions (FN 311)

Jess Saracho Aguirre (Int. Student)

INDEX 1. TIMELINE OF THE MERGER 2. TAKEOVER TACTICS EMPLOYED BY MITTAL 2.1. 2.2. 2.3. 2.4. 2.5. 2.6. 2.7. FRIENDLY APPROACH HOSTILE TENDER OFFER POLITICAL SUPPORT TWO-TIERED TENDER OFFER LEGAL ACTIONS PROXY FIGHT IMPROVED BID

3. TAKEOVER DEFENSES EMPLOYED BY ARCELOR 2.1. 2.2. 2.3. 2.4. 2.5. MARKETING CAMPAING INCREASE THE DIVIDENDS BUY-BACK SHARE PLAN (SELF-TENDER OFFER) POISON PILL. DOFASCO WHITE KNIGHT. SEVERSTAHL

4. ARGUMENTS IN FAVOUR AND AGAINST HOSTILE CORPORATE TAKEOVERS 5. CRITIQUE OF THE BEHAVIOUR OF THE ARCELOR S BOARD OF DIRECTOR

6. LIST OF REFERENCES

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Mergers and Acquisitions (FN 311) 1. TIMELINE OF THE MERGER

MITTAL ACTIONS
January 27th, 2006: Tender offer of Mittal BBC News: Mittal Steel unveils Arcelor bid. The world larger steelmaker, has made an 18,6bn euro bid for rival firm Arcelor. Price: 28,21 per Share Premium: 27% over market price Structure of the deal: Cash+Stocks

Jess Saracho Aguirre (Int. Student)

ARCELOR BOARD OF DIRECTOR REACTIONS

January 29th, 2006: Arcelor reject the bid, because the two companies have a different strategic vision. -Guy Dolle declared that the offer was inadequate and strategically unsound. February 1st, 2006: Arcelor Board of Directors developed a communication strategy attacking the logic of the bid. New York Times: -Jean-Claude Juncker: This hostile bid by Mittal Steel calls for a reaction that is at least as hostile. -Franois Loos: We are opposed to the Success of Mittals public offer for Arcelor. February 12th, 2006: Because of the strong political opposition in Europe, Mittal looked for local political support. The Economic Times: India has accused European governments, opposing Mittal Steels $23 billion bid for rival Arcelor, of discrimination and warned their intervention could affect fragile global trade talks. February, 2006: -Arcelor unveils an 85% dividend hike to fend off Mittal bid. -Arcelor announced that the company would buy back $8,75 billion in stock at a price above the current market. -Arcelor attempted to influence the government to modify the law so as to Mittal have to pay in cash. Luxembourg parliament rejected that measure. March 8th ,2006: Arcelor announced that it had acquired Dofasco pursuant to its $5.6 billion takeover bid. Arcelor set up a special Dutch trust to prevent Mittal from getting access to the asset. May 10th, 2006: Mittal announced: Two-tiered offer, and an increase in price if the offer is recommended by the board The Guardian: Mittal offers to raise bid but only if Arcelor board backs it. May 19th, 2006: Mittal ups Arcelor offer by 34%. Market Watch: Mittal Steel lifts offer for Arcelor to $33 billion. May 26th , 2006: -Arcelor rejects the bid. -Arcelor announces a 13,6bn merger proposal with Severstal, the largest Russian steelmaker. Friendly offer of Severstal. Price: 44 per share Premium: 100% over market price (closing price January 26th) Structure of the deal: Cash+Stocks CONCLUSION - June 25th, 2006 Arcelor Board recommends improved takeover offer from Mittal. Arcelor, eventually, is acquired by Mittal for $ 33,6 bn Financial Times: Arcelor and Mittal agree to 27bn merger. Price: 40,40 per Share Premium: 93% over market price Structure of the deal: Cash+Stocks

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Mergers and Acquisitions (FN 311)

Jess Saracho Aguirre (Int. Student)

2. TAKEOVER TACTICS EMPLOYED BY MITTAL SCHEDULE: 4. Twotiered tender offer

3. Political support 2. Hostile Tender offer

5. Legal actions

6. Proxy fight

1. Friendly Approach

7. Improved bid

2.1.

Friendly approach: -Case Study 3.1. 4th paragraph: After having been rebuffed by Mr. Guy Dolle, Arcelor s president, in an effort to consummate a friendly merger [] -Concept: In a friendly takeover, the targets board and

management are receptive to the idea and recommend shareholder approval (DePamphilis, 2009). -Why? This approach was very convenient for Mittal for the following reasons: i) Friendly takeovers often are consummated at a lower purchase price than hostile transactions (DePamphilis, 2009).

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Jess Saracho Aguirre (Int. Student)

ii) The cost associated with a tender offer, such as legal filing fees and publication costs, make the tender offer a more expensive alternative than a negotiated deal (Gaughan, 2011). iii) A hostile takeover attempt may attract new bidders, who otherwise may not have been interested in the target (DePamphilis, 2009). iii) Postmerger integration process usually is accomplished more expeditiously when both parties cooperate fully (DePamphilis, 2009). -Alternatives. The three main alternatives to a friendly takeover are: i) If initial efforts to take control of the firm are rejected, the acquirer may chose to adopt a more aggressive approach. This approach may include: a) Bear Hug (vid. Infra. 2. Hostile tender offer). b) Proxy Contest (vid. Infra. 2. Hostile tender offer). c) Tender Offer (vid. Infra. 2. Hostile tender offer). d) Toehold bidding strategy. Potential bidders may purchase stock in a target before a formal bid to accumulate stock at a price lower than the eventual offer price. The primary advantage to the bidder of accumulating targets stock before an offer is the potential leverage achieved with the voting right associated with the stock it has purchased (DePamphilis, 2012). In the case at hand, we do not have information enough to know if Mittal had carried out a toehold bidding strategy previously to its tender offer. ii) Developing a business alliance. According to the American Heritage Dictionary, alliance is a union, relationship, or connection by common interest. In the case at hand, Mittal understood that both companies could have done better together; 5/21

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Jess Saracho Aguirre (Int. Student)

nevertheless Arcelors board of director was not of the same opinion. This is the main reason by which an alliance does not seem to be appropriate. iii) Going on operating as independent companies. This alternative sometimes is not seen as a real alternative, and it gives room to close impossible and illogic deal at any rate. 2.2. Hostile tender offer: -Case Study 3.1. 4th paragraph: [] Mittal launched a tender offer in January 2006 consisting of mostly stock and cash for all of Arcelors outstanding equity. -Concept: It is a takeover tactic in which the acquirer bypasses the targets board and management and goes directly to the target s shareholders with an offer to purchase their shares (DePamphilis, 2009). -Why was it used? Mittal was eager to acquire Arcerlor by the reasons established in the Case Study 3.1. Mittal acquired Arcelor to accelerate steel industry consolidation and thus to reduce industry overcapacity. The combined firms could have more leverage in setting prices and negotiating contract with major customer, such as auto and appliance manufacturers, and suppliers, such as iron ore and coal vendors, and eventually realize $1 billion annually in pretax cost saving . Mr. Guy Dolle had repeatedly rebuffed all the Mittals proposals, therefore, it seemed that Mittal had no alternative option if the Indian company really wanted to take control over the European giant. -Alternatives: As explained previously, Mittal was forced to launch a hostile takeover, nevertheless several hostile tactics could be seen

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Jess Saracho Aguirre (Int. Student)

as alternative to the tender offer, between then, it is important to highlight: i) Bear hug, which involves the mailing of a letter containing an acquisition proposal to the board of directors of a target company without prior warning and demanding a rapid decision (DePamphilis, 2009). In the case at hand, this mean would have been useless because of the previous informal contacts between Mittal and Dolle. i) Proxy Contest. There are two main forms: a) Dissident shareholders attempt to win representation on the board of directors (DePamphilis, 2012). In this case, this first option did not occur. b) Dissident shareholders seek to change firms bylaws or force management to take some particular action dividend payments, share repurchase, (e.g., acquisition)

(DePamphilis, 2012). This second option was not one of the first tactics used by Mittal, but eventually it was used in order to force the management to accept the offer in the last stage of the negotiation, as we will study later (vid. Infra. 6. Proxy fight). 2.3. Political support:

Case Study. 4th paragraph: The reaction from Arcelors management, European Union, and government officials was swift and furious [] European politicians supported Mr. Dolle. Luxembourgs prime minister, Jean Claude Juncker, said that a hostile bid called for a hostile response. As response to all the statements of the European politicians, Mittal looked for political support, and Indian government accused European Union of discrimination and lack of objectivity while dealing with a mere

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Mergers and Acquisitions (FN 311) business issue. -

Jess Saracho Aguirre (Int. Student)

This private offer was becoming a public

international conflict. Why? Mittal attempted to look for an explicit political support of the Indian Government to avoid more intromissions of the European institutions. The key of this measure was warning Europe that if they went on discriminating the offer of Mittal, we would face an international conflict. This tactic was essential to avoid that the Luxembourg parliament would pass a law requiring Mittal to pay completely in cash. 2.4. Two-tiered offer: -Case Study 3.1. 6th paragraph: To counter these moves, Mittal Steet said in mid-February that, if it received more than one-half of the Arcelor shares submitted in the initial tender offer, it would hold a second tender offer for the remaining shares at a slightly lower price. -Concept: A two-tier offer is one in which the bidder, generally a hostile one, sets a deadline for an initial, high price. Those who sell their stocks to the bidder after the deadline get a second, lower price (2006, Reed & Nesvold). -Why? Mittal was eager to acquire Arcerlor, and this action is just another measure of pressure to get the approval of the Arcelors shareholders. In general terms, it may be said that the intent of the two-tiered approach is to give target shareholders an incentive to tender their shares early in the process to receive the higher price. Nevertheless, this threat was not really useful and the two next great steps (improved bid and proxy fights) were friendlier to the interest of all shareholders. -Alternatives: The only real alternative to this movement was an enhancement in the bid. It was done, once Mittal realized that this

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Mergers and Acquisitions (FN 311)

Jess Saracho Aguirre (Int. Student)

threat would be useless, because of the extraordinary defenses employed by Dolle. 2.5. Legal actions: -Case Study 3.1. 7th paragraph: Following completion of the Dofasco deal in April 2006, Arcelor set up a special Dutch trust to prevent Mittal from getting access to the asset [] Mittal immediately sued to test the legality of this tactic. -Concept: Legal actions are those measures based on pre-

contracts, letters of intent, memorandums of understanding, or even oral agreements, carried out by the acquirer to force the board of director to negotiate or to the sell of the company. Litigation is a common tactic used to pressure the target board to relent to the bidder s proposal or remove defenses DePamphilis, 2012). expensive. In the case at hand, we are not observing a legal action oriented to get the control of the company itself, or to oblige the board of director to negotiate, but to attack one of the several defenses erected by Dolle. -Why? Arcelor was sued by Mittal by two main reasons: i) Arcelor acquired Dofasco thanks to a $5.6 billion takeover bid, made completely in cash, and subsequently transferred the property of the company to a Dutch trust. Arcelor had great reserves and Mittal was of the opinion that such reserves could be used to make cheaper the acquisition. Nevertheless, because of this movement Mittal have access to such reserves. ii) In addition, this acquisition could potentially prevent the acquisition of Arcelor by Mittal because of the requirements 9/21 It tends to be useful, but it is extremely

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Jess Saracho Aguirre (Int. Student)

of divesture (impossible to comply with, after the set up of the trust) of the American competition authorities. 2.6. Proxy fight : -Case Study 3.1. 9th paragraph: Investors holding more than 30% of the Arcelor shares signed a petition to force the company to make the deal with Severstahl subject to a traditional 50,1% or more of actual votes cast. After major shareholders pressured the Arcelor board to at least talk to Mr. Mittal [] Arcelor still refused to talk. [] Shareholders anger continued, and many investors opposed the buyback because it would increase Mr. Mordashovs ultimate stake in Arcelor to 38% by reducing the number of Arcelor shares outstanding. -Concept: As previously established, a proxy fight takes place

when dissident shareholders seek to change firms bylaws or force management to take some particular action (e.g., dividend payments, share repurchase, acquisition) (DePamphilis, 2012). This is exactly what happened in the case at hand. Why? After months of negotiations, Mittal did not find the proper solution to the resistance of the board of directors of Arcelor, and some of its takeover tactics were not being so useful. This is the main reason by which Mittal attempted to rally large shareholder support against what were portrayed as Arcelor managements self-serving maneuvers. 2.7. Improve the conditions of the bid (monetary and nonmonetary) : -Case Study 3.1. 10th paragraph: In late May, Mittal raised its bid by 34% and said that if the bid succeeded, Mittal would eliminate his firms two tiered share structure, giving the Mittal family hares ten times the voting rights of other shareholders. 10/21

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Jess Saracho Aguirre (Int. Student)

-Why? It was seen by Mittal as the last resort, the last opportunity to get the support of the board of director and, subsequently, the approval of all shareholders. However, the board of director rejected the enhanced offer in first instance, and just after the pressure exercised by the major shareholders (vid. Supra. 2.6. Proxy Fights) the board of directors agreed to Mittals final bid. -Alternatives: given the situation of the negotiation, as we have highlighted previously, improving the bid, together with the rest of tactics put into practice, was the only real solution to take control over the target.

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Mergers and Acquisitions (FN 311)

Jess Saracho Aguirre (Int. Student)

3. TAKEOVER DEFENSES EMPLOYED BY ARCELOR SCHEDULE: 1. Marketing Campaing

5. White Knight. Severstahl

2. Increase in Dividends

4. Poisson Pill. Dofasco

3. Buy-Back Shares plan (Selftender offer)

Antitakeover measures have evolved greatly over the past quarter of a century (Gaughan, 2011). As we may observe in this case, there are hundreds of tactics that may be used in order to avoid a takeover. It is important to distinguish in general terms between pre-offer defenses and post-offer defenses. In the case at hand, all the defenses observed take place once the offer has been done, thus they are post-offer defenses. 3.1. Marketing Campaign: -Case Study 3.1. 4th paragraph: The reaction from Arcelors management, European Union, and government officials was swift and furious. Guy Dolle stated flatly that the offer was inadequate and strategically unsound. European politicians supported Mr. Dolle. Luxembourgs prime minister, Jean Claude

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Jess Saracho Aguirre (Int. Student)

Juncker, said that a hostile bid called for a hostile response. Trade Unions expressed concerns about potential job loss. [] Arcelor also backed a move to change the law so that Mittal would be required to pay in cash. However, the Luxembourg parliament rejected that effort. -Why? Mr. Dolle engaged as primary defense in an integrated marketing campaign in order to repel Mittal because of its low cost and great effectiveness. The CEO developed a campaign of terror to spread the feeling that an European company was being conquered by an Asian one, with all the negative implications of such a deal1. This marketing campaign was based on five main cornerstones: 1. Political support. (vid. Case Study 3.1. 4th paragraph) 2. Trade Unions support. (vid. Case Study 3.1. 4th paragraph) 3. Lobby in the Luxembourg Parliament to change local laws. (vid. Case Study 3.1. 5th paragraph) 4. Development of a new strategic plan, more appealing for current shareholders. 5. Reject direct negotiations with Mittal. (vid. Case Study 3.1. 9th paragraph) These actions may be included under those actions oriented to attack the logic of the bid (Weston et al., 2004). 3.2. Increase in Dividends: -Case Study 3.1. 5th paragraph: In early February, Arcelor doubled its dividend []. -Why? The two main reasons are: It is important to highlight: - Potential Job loss (Case Study 3.1. 5th Paragraph) -Lack of a shared strategic vision (Case Study 3.1. 5th Paragraph)
1

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Jess Saracho Aguirre (Int. Student)

i) Dolle, at the same time that was satisfying its current shareholders, was doing the company less attractive of being acquired because of the cash that was spending to pay this extraordinary high dividends. ii) Because of the high grade of satisfaction of the current shareholders with the current dividend policy of the Board of Directors, they would not accept the offer of Mittal. These two reasons are clear and unquestionable. However, they are also irrational. The fact that the company is offering to the shareholders such a high dividend, at least they were suffering an extraordinary shortage of cash, should not influence the decision they might take regarding the acquisition. This decision should be base uniquely in the creation of value, and the growth prospect of Mittal because of the new managers. 3.3. Buy-back shares plan (Self-tender offer): -Case Study 3.1. 5th paragraph: In early February, Arcelor [] announced plans to buy back about $8.75 billion in stock at a price well above the then current market price for Arcelor Stock. These actions were taken to motivate Arcelor shareholders not to tender their shares to Mittal. -Concept: A self-tender is a defensive measure implemented to defeat an unsolicited tender offer or at least to obtain a higher price. The company announces its intentions to repurchase its own outstanding stocks, or a portion thereof, to prevent the offeror from acquiring a controlling interest in the company. -Why? In the case at hand, the self-tender is not enough to prevent the offeror from acquiring a controlling interest if the shareholders accept the operation, but it is an useful way of avoiding that most of shareholders accept the Mittals bid, and in the last case, it is a good movement to increase the price of the bid. 14/21

Mergers and Acquisitions (FN 311) 3.4. Poison Pill. Dofasco :

Jess Saracho Aguirre (Int. Student)

-Case Study 3.1. 7th paragraph: In late 2005, Arcelor outbid German steel-maker Metallgeschaft to buy Canadian steel-maker Dofasco for $5billion. Mittal was proposing to sell Dofasco to raise money and avoid North American antitrust concerns. Following completion of the Dofasco deal in April 2006, Arcelor set up a special Dutch trust to prevent Mittal from getting access to the asset. The trust is run by a board of three Arcelor appointees. The trio has the power to determine if Dofasco can be sold during the next five years. -Concept: The expression poison pill comes from the domains of espionage. This refers to back in the days when agents were instructed to swallow a cyanide pill instead of being captured or as in our case overtaken (Zarin & Yan, 2011). In M&A world, poison pill are often referred to as shareholder rights plan, but in broad terms, we could say that a poison pill is any type of mechanism designed to cause inconvenience with the aim of dissuading a predator company from launching a takeover bid. This expression has been used by several newspaper regarding the case at hand (e.g. New York Times (3/11/2006): Poison Pill Is Among the Reasons Mittal Steel Deal Remains a Multi-Company Tangle) -Why? As previously explained, Doll in a masterstroke attempted to block the acquisition by two means: i) The Dofasco transfer to a Dutch foundation could potentially block Mittal's takeover of Arcelor because it might raise antitrust concerns in the United States. ii) Arcelor acquired Dofasco paying completely in cash, $71 per share, what deprived Mittal of using Arcelors reserves to finance its own acquisition.

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Mergers and Acquisitions (FN 311) 3.5. White Knight. Severstahl :

Jess Saracho Aguirre (Int. Student)

-Case Study 3.1. 9th paragraph: In a deal with Russian steel maker OAO Severstahl, Arcelor agreed to exchange its shares for Alexei Mordashovs 90% stake in Severstahl. The transaction would give Mr. Mordashov a 32% stake in Arcelor. Arcelor also scheduled a unusual vote that created very thought conditions for Arcelor shareholders to prevent the deal with Severstahl from being completed. -Concept: when the corporation is the target of an unwanted bid or the threat of a bid from a potential acquirer, it may seek the aid of white knight- that is, another company that would be a more acceptable suitor for the target. The white knight will then make an offer to buy all or part of the target company on more favorable terms than those of the original bidder (Gaughan, 2011). -Why? This was a very aggressive measure of the Arcelors Board of Director to erode the deal with Mittal. If Arcelor had accepted Severstahl proposal, they would have created the largest steel company in the world, removing Mittal from its hegemonic position. The Severstahl deal was described as a friendly deal, but all in all, they were giving the control of the company to a Russian magnate to avoid, at any rate, give the control to Mittal. Shareholders, and the market in general did not understand this deal, and it was strongly criticized. This takeover defense made the offer of Mittal more time consuming and expensive (Mittal had to 140 millions as termination fee to Mordashov), but it did not provoke an increase in the last bid of Mittal, so according to some scholar it could not be considered a White Knight defense strategy.

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Jess Saracho Aguirre (Int. Student)

4. ARGUMENTS IN FAVOUR AND AGAINST HOSTILE CORPORATE TAKEOVERS -Concept: -In a friendly takeover of control, the targets board and management are receptive to the idea and recommend shareholder approval. To gain control, the acquiring company generally must offer a premium to the current stock price (DePamphilis, 2009). Friendly takeovers are essentially driven by synergy considerations (Morck et al., 1998). -An unfriendly or hostile acquisition occurs when the initial approach is unsolicited, the acquired company does not have the intention to be acquired at that time, and the targets management contests the approach (DePamphilis, 2012). Hostile takeovers are driven by the discipline of the underperforming target management (Morck et al., 1998) -Arguments in favor of Friendly takeovers: Traditionally it has been said that friendly takeovers are more convenient for the acquirer than any hostile approach, by the following reasons: i) Friendly takeovers often are consummated at a lower purchase price than hostile transactions (DePamphilis, 2012). In the case at hand, we can ratify this argument. If the board of director had not taken so many measures, they company could have been acquired with a lower premium (between 30% and 50%). ii) The cost associated with a tender offer, such as legal filing fees and publication costs, make the tender offer a more expensive alternative than a negotiated deal (Gaughan, 2011). It is true than a tender offer may generate more costs, but these costs are relatively low in relation with the expectation of added value.

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Jess Saracho Aguirre (Int. Student)

iii) A hostile takeover attempt may attract new bidders, who otherwise may not have been interested in the target (DePamphilis, 2012). This leads to an increase in the price that is beneficial for the current shareholders. In the case at hand, we can look at Severstahl to understand this argument. iii) Postmerger integration process usually is accomplished more expeditiously when both parties cooperate fully (DePamphilis, 2012). This argument is confusing, because it is very common, as in the case studied, that an initial hostile offer become a friendly one in the last stage of the negotiation. In this case, there is no real postmerger issue. If the offer does not become friendly, the management of target will be immediately fired after the acquisition, therefore postmerger integration should not be an issue. -Argument in favor of Hostile takeovers: i) The friendly approach surrenders the element of surprise (DePamphilis, 2012). From the buyer perspective, an hostile takeover surrenders the element of surprise, but this element becomes useless when there are competitors, or the option of erecting any defense against the bid, as we have seen in the analyzed case. ii) Negotiation also raises the likelihood of a leak and spike in the price of the targets stock as arbs seek to profit form the spread between the offer price and the targets current stock price. transaction (DePamphilis, 2012). This speculative increase in the targets share price can add dramatically to the cost of the In the case at hand, we can clearly observe this phenomenon and it is a obvious example of hostile bid, therefore we cannot agree with the conclusion of DePamphilis. What really raises the likelihood of a leak and spike in the price of the targets stock is not the negotiation itself, but the leakage of information. -Conclusion:

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Jess Saracho Aguirre (Int. Student)

As we may appreciate from the traditional above-mentioned arguments, when discussing pros and cons of both approach we are defending biased pros a cons. In order to reach a rational conclusion, it is necessary to go beyond the dichotomy purchaser-seller, and understand the concept creation of value in general terms, the value that current shareholders receive, plus the value created by the new management. M&A is not about splitting the baby, but making bigger the baby, in other words, creation of added value. Once said that, In the long-term there is a clear evidence of superior value creation in hostile over friendly acquisition (Sudarsanam & Mahate, 2006) what mean that in average the value obtained by synergies is lower than the unlock value obtained by restructuring the company and firing a poor board of directors. In the analyzed case, we may observe the positive features of a friendly takeover (based on synergies) and also those of hostile bids (based on the unlock value). In a nutshell, this is a paradigmatic example of a deal that creates added value and makes absolutely sense, notwithstanding the statements of Dolle during the negotiation attacking the internal logic of the bid.

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Jess Saracho Aguirre (Int. Student)

5. CRITIQUE OF THE BEHAVIOUR OF ARCELOR S BOARD OF DIRECTOR As a general principle, because of the duty of loyalty to the corporations shareholders, the board of directors of the target corporation has to adopt defensive measures to defeat a takeover attempt that is contrary to the best interests of the corporation and its shareholders (2006, Reed and Nesvold). The problem comes with the interpretation of the abstract concept best interests of the corporation and its shareholders. Sometimes, the own short-term and speculative interests of some shareholders (e.g. venture capital) are different to the interests of the long-term shareholders, also known as strategic investors (nearer to what could be called the best interest of the corporation itself). There are two main theories, which attempt to explain the analyzed situation: The management entrenchment hypothesis and the shareholder interest hypothesis. The former proposes that managers of a corporation seek to maintain their position through the use of active and preventive corporate defenses. The latter defends that stockholder wealth rises when management takes action to prevent changes in control (Gaughan, 2011). In the case at hand, it seems that Arcelors board of directors, in first instance, was protecting its own interests (management entrenchment hypothesis). However, because of all its measures, they got Mittal to pay a 93% premium over market price when the deal began. So, the result was unquestionably in favor of the interest of the shareholders (shareholder interest hypothesis). At last, but not least, it is important to highlight that Arcelors Board of Director could have done more to avoid this acquisition, not once the offer was launched, but previously (e.g. shark repellents and poison pills).

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Mergers and Acquisitions (FN 311) 6. LIST OF REFERENCES

Jess Saracho Aguirre (Int. Student)

DePamphilis, D., 2012. Mergers, Acquisitions and Other Restructuring Activities. Academic Press, San Diego.

Gaughan, P., 2011. Mergers, Acquisitions and Corporate Restructurings. John Wiley & Sons Ltd, New Jersey.

Morck, R. M., Shleifer, A., Vishny, R.W., 1988. Characteristics of targets of hostile and friendly takeovers in Alan J. Auerbach, ed., Corporate Takeovers: Causes and Consequences, National Bureau of Economic Research, Chicago.

Reed Lajoux, A., Nesvold, H. P., 2006. The Art of M&A Structuring. Techniques for Mitigating Financial, Tax, and Legal Risk. McGraw-Hill, New York.

Sudarsanam, S., Mahate, A. A., 2006. Are Friendly Acquisitions Too Bad for Shareholders and Managers? Long-Term Value Creation and Top Management Turnover in Hostile and Friendly Acquirers. British Journal of Management, London.

Zarin, S., Yang, E., 2011. Mergers and Acquisitions: Hostile takeovers and defense strategies against them. Gothenburg. International Business, University of

Weston, J.F., Mitchell, M.L., Mulherin J.H., 2004. Takeovers, Restructuring, and Corporate Governance. Pearson Prentice Hall, New Jersey. 21/21