Mergers, Acquisitions and Takeovers Case Study

ThyssenKrupp AG: Consolidating Presence in the US

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Abstract:
ThyssenKrupp AG, the largest steel company of Germany, offered to acquire the largest steel company of Canada, Dofasco Inc. Luxembourg-based Arcelor S.A, the world’s second largest steel company, also intended to acquire the Canadian company. Dofasco Inc is a leading automotive steel manufacturer and supplies to the leading automobile manufacturers of the US. Both Arcelor and ThyssenKrupp are the suppliers of automotive steel to the European automobile industry, intending to make a foray in the US automotive steel industry. Being a major supplier to the leading carmakers in the US, Dofasco Inc. is the obvious choice for both the companies. However, the analysts are skeptical whether the high price for Dofasco will be a prudent decision in the long run. The case provides a scope for discussing the recent trends in the global steel industry. It also analyses how ThyssenKrupp plans to leverage its investment and overcome the challenges.

Pedagogical Objectives:

• To discuss the trends, patterns of global steel industry and consolidation as a major strategy in fragmented steel industry globally
• To discuss acquisition process of Dofasco Inc. by ThyssenKrupp AG, potential synergies and problems associated with the acquisition
• To discuss how acquisition as a growth strategy help companies to consolidate in fragmented steel industry
• To discuss the key factors which make an acquisition a successful one
• To discuss in details about the problems of acquisition and how the maximum leverage can be gained
• To discuss, the bidding process and funding of an acquisition
• To discuss the value chain of the steel industry and primary steel making process and secondary steel making process
• To discuss the concept of ‘White Knight’, ‘Black knight’ and ‘Poison Pill’.

Keywords : Mergers,Acquisitions,Alliances Case Study;Thyssenkrupp AG; Arcelor; Global steel industry; Acquisition; Consolidation; Primary steel making; Secondary steel making; Value chain; Automotive steel; Hostile bid; Mittal Steel; Dofasco; Merger and acquisition; Nafta, Raw material

Contents : 
The Global Steel Industry
Rationale And Expected Synergy
What Lies Ahead
Steel Kings: World’s Biggest Crude Steel Producers
Detroit’s Share Of Us Passenger Car Sales
World Steel Production In 20th Century
Top Five Steel Producing Country
Highlights & Performance