Acquisitions to drive growth: ArcelorMittal
Global steel giant ArcelorMittal has said it is likely to continue to expand its base by acquiring companies worldwide even though it maintains that inorganic growth route could harm its financials.business Updated: Feb 14, 2010 23:38 IST
Global steel giant ArcelorMittal has said it is likely to continue to expand its base by acquiring companies worldwide even though it maintains that inorganic growth route could harm its financials.
“ArcelorMittal has grown through acquisitions and will likely continue to do so. Failure to manage external growth and difficulties integrating acquired companies could harm ArcelorMittal's future results of operations, financial conditions and prospects,” NRI billionaire LN Mittal-led company said in a regulatory filing to the US Securities and Exchange Commission.
The world's largest steel-maker, formed after the merger of Mittal Steels and Arcelor in 2006, has been growing primarily through acquisitions.
The company, however, said it is also banking on organic route for capacity expansion, which also suffers from operational risks.
"...Its growth strategy includes greenfield and brownfield projects that are inherently subject to completion and financing risks, which, if realised, could adversely affect ArcelorMittal’s results of operations and financial condition," it said in the filing.
ArcelorMittal chairman LN Mittal had last month criticised the investment climate in India and rued the inordinate delays his proposed projects — one each in Jharkhand and Orissa which are yet to take off even after four years — entailing an estimated investment of Rs 1 lakh crore.
Arcelor Mittal marked its first operational presence in the country by entering into a JV with UttamGalva. The company has acquired a 28.8 per cent stake in Miglani-owned UttamGalva Steels and is now buying an 4.9 per cent additional stake in the Mumbai-based secondary steel producer.