Lakshmi Mittal: The steel magnate
Lakshmi Mittal started out in the steel industry at a time when many had written it off.india Updated: Apr 09, 2006 13:54 IST
Lakshmi Mittal, the world's third-richest person and head of the world's biggest steel company, unveiled his most audacious bid on Friday -- a $23 billion takeover of his largest rival.
Mittal, who made himself a multibillionaire by leading consolidation of the steel industry, said his offer for steel maker Arcelor marked a step change in the process, creating a behemoth with 10 per cent of world volume.
Lakshmi Nivas Mittal started out in the steel industry at a time when many had written it off.
His rags-to-riches tale has all the ingredients of a best-selling novel. The tycoon was born in a Rajasthan village with no electricity and started his working life in his father's small steel mill in Kolkata.
A keen practitioner of yoga, Mittal made his fortune by transforming ailing steel mills around the globe into money spinners by cutting costs, exploiting economies of scale, and selling higher-value products into a growing market.
Forbes.com says Mittal is now worth $25 billion, a figure bettered only by Microsoft founder Bill Gates ($46.5 billion) and Berkshire Hathaway's Warren Buffett ($44 billion).
Despite his wealth, or perhaps because of it, Mittal shies away from the limelight although his lavish spending often makes headlines. In 2003, he reportedly spent 70 million pounds ($125 million) to buy the most expensive home in Britain.
His path to success began after he branched out from working with his father to set up his own steel plant in Indonesia in 1976, using cheap labour but the best technology.
He expanded into Trinidad in the 1980s, when many had dismissed the steel industry as unprofitable and highly localized, and also began acquiring former state-owned plants in the former Soviet Union and Eastern Europe.
Mittal ran into controversy in 2001 after Prime Minister Tony Blair wrote a letter supporting his takeover of Romania's biggest steelworks just months after Mittal donated 125,000 pounds to Blair's ruling Labour Party.
That "cash-for-favours" scandal appeared to make Mittal even more wary of the press. But he has been unable to avoid the inevitable publicity as his fortune has rocketed thanks to soaring demand from China which has driven up steel prices in recent years.
Mittal cemented his position as a steel supremo in 2003 when he consolidated his assets into stock market-listed Mittal Steel , of which he is chief executive and chairman.
The company was forged when Mittal's private steel business, Antilles-based LNM Holdings (his initials), merged with publicly traded Ispat International, of which his family owned 77 per cent, and clinched a deal to buy Ohio-based ISG.
Mittal and his family own 88.6 per cent of Mittal Steel, with his two children closely involved in the business. His son Aditya is the firm's president and finance director while his daughter Vanisha is a director. Their stake in the enlarged Mittal Steel will be diluted to 51 per cent if the Arcelor bid succeeds.