Mergers and acquisitions: causes and consequences: search for market dominance

• Autor(a) principal: Santos, Bruno Alexandre Lopes dos
• Data de Publicação: 2010
• Tipo de documento: Dissertação
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: http://hdl.handle.net/10071/3805
• topic: Mergers and acquisitions; Defensive measures; Synergies; Future cash flows; Fusões e aquisições; Medidas defensivas; Sinergias; Cash flows futuros

Mergers and acquisitionsmarked a turning point in the economic developmentof U.S economy, which quickly became a worldwide referenceon value creation. In 2006, on a dispersed industry, either at upstream or downstream levels (steel industry) a strong example of a consolidation process took place creating a dominant player. Emergency of the Chinese economy added to the perspectives of a financial crisis made the two largest steel players to enter on a combination process, process which was far from simple. The hostile take-over bid launched by Mittal Steel did not please Arcelor SA Board of Directors which implemented some defensive measuresin order to avoid the possibility of being acquired by its main rival and, on more practical terms, leading to the increase of the offered price. Due to the forced price revision the deal was consummated. According to the expected synergiesexpectable, by projecting future cash flows, there are positive predictions for the future of ArcelorMittal. However, nowadays the economic and political future is more uncertain than ever and, although some synergieshave already been achieved, the future cash flows can not be taken as granted. Some aspects such as the market changes, corporate governance and currency exchange risk can not be forgotten by ArcelorMittal group.