Daniel Gross writes that the good folks in the West are generally happy to sell real estate to nouveau riche Arabs and Asians - as they pay top dollar. In 2004, Lakshmi Mittal, the acquisitive Indian steel baron, dished out $128 million for a residence in London. (And few of the bienpensant clucked when Mittal rented out Versailles for his daughter's wedding.) Afterall Mittal is the third richest man in the world behind Bill Gates & Warren Buffett.
But when the purchase involves a corporation that produces an essential industrial product, that we-are-the-world comity disappears. When Mittal announced a hostile bid for Luxembourg-based steel company Arcelor, the French and Luxembourgians (Luxembourgeoisie?) have reacted harshly. Arcelor's board rejected Mittal's offer as unacceptable in every way. Arcelor's Runyonesque CEO, Guy Dolle, has sniffed that his steel is "perfume" while Mittal's product is like "eau de cologne." Thierry Breton, France's finance minister, fretted over the potential clash of civilizations that would ensue if Mittal were to emerge victorious. This prejudice is misplaced, even stupid. The consolidators emerging out of India, the Middle East, and Latin America are far more cosmopolitan and savvy than their European and American counterparts. The managers and entrepreneurs behind companies like Mittal, or Mexico's cement giant Cemex, or Egypt's Orascom, are the best and brightest those countries have to offer. They are buying companies run by Europeans and Americans who are, in many cases, certainly not the best and the brightest. Otherwise, their firms wouldn't be in such poor shape that they might need a foreign bailout. But it should not be lost sight that Mittal Steel is headquartered in Rotterdam and managed out of London. This takeover battle is, therefore, entirely a European affair. Times are changing – the sooner society realizes, it is better for all.
Update : Arcelor has since stated that it would consider a cash offer.
Category :Emerging Trends
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