Merger of mittal stell and arcelor steel analysis

Merger of mittal stell and arcelor make analysisThis case is nigh the unifyr of Mittal blade fabrication and Arcelor Steel Industry which was merged in 2006. This assignment covers the topics of change worry and its theories. The case is related to Plan Do Check Act (PDCA) theory. The headquarters are situated in Avenue Da La Liberate, Luxembourg. The business of these 2 companies are served world wide after the merger. The Chairman of the companies is Laxshmi Mittal.These companies deal with m either products such as Steel, Flat Steel, Long Steel products, Stainless Steel, Wire products, Plates. The companies not only provide these products in reasonable ranges but also provide good quality. Before the merger Mittal Steel Industry used to produce masses however Arcelor Steel Industry used to produce highest revenues. After the merger these companies became number one marque exertion in producing values and revenues as well. The status of the revenue of this merged fellowsh ip in 2009 was US$ 65.11 billion and profit was US$ 118 billion. The operating income was US$ 1.678 billion in 2009. In further pages of this assignment the theories of change caution are also related to the cases.TABLE OF CONTENTSIndexINTRODUCTIONMITTAL steel INDUSTRYMITTAL STEEL co. was formed by the merger of LNM HOLDING and ISPAT INTERNATIONAL.LAKSHMI MITTAL who is the CEO of the company, He and his family hold 88% of the company and its headquarter was in ROTTERDAM NETRHERLAND. The company was produced words spectacularst steel in terminal of volume and also largest in turnover which merge in ARCELOR MITTAL. The company establish a meal stone in the steel world laborARCELOR STEEL INDUSTRYARCELOR was established in February 2002 by combining 3 steel making companies i.e. ARCERALIA SPAIN, ARBED LUXEMBOURG and UNISON FRANCE.In ARCELOR more than 104000 employees was working in 2006 over 60 countries. ARCELOR revenues were 40.6billion euros and its production was 53.5 million t onnes of crude steel. Their products were flat carbon steel, long carbon steel, stainless steel and steel solution and services.The ARCELOR steel and b MITTAL steel merge in ARCELORMITTAL steel in 2006. Now, ARCELOR MITTAL is words no. 1 steel maker company with the revenue of $ 105.2 billion a course. The company produced crude steel and production of crude steel is 116 millions tons per year. It produced 10% of steel in the world. The co. has more than 310000 employees in over 60 countries across 4 continents. The co. is leader in the global market in various fields which has automotives construction household appliances and packaging. Mittal steel was leader in steel industry in terms of volume whereas Arcelor steel was leader in terms of revenue. After merge it becomes highly fragmented steel industry in the world. This industry belong to steel market, it strawman in Europe, Asia, America and Africa. It gives the global exposure to the steel industry. Now ARCELOR MITTAL is lo oking for high process in Indian and Chinese market. Its also listed with the stock win over of New York, Luxembourg, Paris Brussels , Amsterdam and Spanish stock exchange of Barcelona Bilboa.Change Management TheoriesPLAN DO split up ACT (PDCA)Plan-Do-Check-Act front certain by Walter Shewhart and it was popularized by Edwards Deming. PDCA(plan-do-check-act) is a four-step problem-solving process typically used inbusiness improvement. Its also known as Shewhart cycle, Deming cycle, PDSA (PLAN DO STUDY ACT), PDCA (PLAN DO CHECK ACT). This Act is useful for change management. The PDCA cycle should be repeated again and again for continuous improvement in an organization.PLAN To improve your operations first by finding out what things are going wrong (that is identify the problems faced), and come up with ideas for solving these problems.PROCEDURE- Recognize an opportunity and plan a change.DO Implement the new processes.PROCEDURE- Taking small steps in controlled circumstances f or execute the plan.CHECK Measure the new processes and compare the results against the expected results to ascertain any differences.PROCEDURE- Review the test, analyze the results and identify what youve learned.ACT Analyse the differences to determine their cause. Each will be part of either one or more of the P-D-C-A steps. experience where to apply changes that will include improvement. When a pass through these four steps does not result in the need to improve, refine the scope to which PDCA is use until there is a plan that involves improvement.PROCEDURE- Take action to improve the processBenefits of the PDCA cycleThis cycle freighter solve the problems,Project management,Daily routine management for the individual and team,Continuous development,New product development.THE CHANGEThe merger was started from 27th January 2006 but it finalised on 25th June 2006It Is valued at 26.8 billion Euros in long horse it was 33.5 billion which was 44% higher than initial offer 18.6 bi llion EurosMITTAL was the largest share holder with 45% stake in the merged entity.THE MERGERThe change was inevitable in the Steel Industry and the aim was globalization and consolidation in the Steel Industry. MITTAL defines the deal and set pace for the industry.In June 2006 MITTAL STEEL and ARCELOR reach an organization to merge the two companies. The combine group which name formed was ARCELOR MITTAL and the head quarter established in Luxembourg.2006 was a very exciting and growing year for MITTAL ARCELOR because in this year new milestone were achieved by some(prenominal) companies. The company was converted by two companies which lead the industry through mergers and acquisition.Change management was the merger was on the basis of ADHOC basis and it was run on temporary basis.After this the second step was not temporary basis now the ARCELOR altered the merger and then the new company was formed with the name of ARCELOR MITTAL and it perform all the function of one compa ny and now it leads the whole of the steel industry.ARCELOR + MITTAL = ARCELOR MITTALARCELOR MITTAL- building OUR COMPANY WITH THE NEED OF FUTURE GENERATION IN MIND.WHY CHANGES IMPLEMENTEDThe aim of company was to become largest company as twain company were large but some(prenominal) was in competitor with each early(a) but the aim of the company was to become no. 1 in the steel industry which was not easily possible for both of them individually.Companies want to achieve economy of scale. Economy of scale achievement is very difficult for both of the company. Every company wants to growth but various factor are countable in the way of it. So one of the factors was competition in different field thats wherefore change was necessary for achievement of economy of scale.Steel demand was strong in 2006 in developing industry as the expert shows the relevant data about growing of it thats why one way growth was very difficult in steel industry so change was necessary in steel indu stry.Both are very strong MITTAL in terms of volume and ARCELOR in terms of revenue which attract to each other. Both knew about their strength and weakness thats why both knew what they are doing because this was the requirement of both of the company. So change is necessary and both companies want to adopt these changes in plebeian way.This case can be related to the theory of Plan Do Check Act as following changes were occurred according to the theoryPlan- Both the companies plotted to combine with each other as there will be profitable changes after the merger.Do- Both the companies tried to find out the homes of the company that how it can be profitable in the global market. They find out the scale of the economy as the achievement of economy of scale was very difficult for both the companies.Check- The companies checked both the status of the companies as steel demand was strong in 2006 in developing industry so the change was necessary and both companies want to adopt chang es in mutual way.Act- Both the companies were very strong in their ways however they finally merged by analysing the future situation and status of the company in the market. They knew their strength and weaknesses so the merger was resulted successful.MARKET POSITION IN REGION AFTER CHANGENO 1 sexual union AMERICANO 1 IN WESTERN EUROPENO 1 IN EASTERN EUROPE AND CISNO 1 IN southbound AMERICANO 1 IN AFRICASTRATEGIC PRESENCE IN ASIAACHIVEMENTS AFTER CHANGESOperation of company achieve more than 20 countriesThe production of steel crossed 116 millionsThe annual production capacity is 130 million s tonnesSteel shipment produced approximate 110 million tonnesRevenue from shipment is generated 105.2billion US$Company is announced 35 more acquisitionThe organic growth of company 20 million tonnesThe company has unique capability in the steel industry in the field of R DARCELORMITTAL GROWTH PLAN IN FUTUREIn the shipment company will adopt 5 year plan in which 20% increase in 5 yearsIt a dopt growth plan 2012 and it called growth plan 2012For 2012 company tooshie focused on 131 million tonnes productionCompany strategy mainly focused on high growth market and low cost areasThe growth plan in 2012 is approximately 75% which have make already or approved For a potential investment of 7billion US$ over 6 years.CONCLUSIONWHY THE CHANGE WAS SUCCESSFULThe change management was a synergy change. It is related with the team performance. Both the companies want to work like a team so both were clear in their field thats why change management was successful in these companies.Together they brought iron, technology and marketing expertness which in past they were brought separately it becomes another change which follow both of the company they know their powers in their field so when they combined they use in the combined way and they also share their power in one way thats why change was successful.They follow the merger process which is adept at combining business. The me rger process which is follow by many companies but cover merger process is that which follow the right way in the right time with the right company. So in this way both company follow the same procedure of successful thats why the change was successful.Both of were sharp the growth of each other thats why they know what they have done and what they earn from this management change because they know where they stand and what they will be done so they know about change very well thats why change process they follow which made history in the steel industry.They was the take up competition in the market thats why they knew very well strength and weakness of each other which made best connection with each other which made path for the successful change it shows both of the company leadership techniques for growing one.They have different quality of top level in both ways from the MITTAL point of view the volume they produced and from the ARCELOR point of view revenue they earn so both have unique but also stringy quality in their field which made change successful.Current StatusTotal Assets US$ 127.7 billion (2009)Total Equity US$ 65.40 billion (2009)Employees 281700 (2009)