Top brass from Mittal Steel N.V. and International Steel Group boasted Wednesday to steel analysts that they will be creating an unbeatable steel giant when Mittal buys ISG next month.
“As I said, we want to become the most admired steel institution,’’ Mittal chairman and CEO Lakshmi Mittal told investors. “Our financials are very strong. We have proven we have an excellent management team. We’re better positioned than some of our competition.”
In the two-hour presentation which is still available on the company’s Web site at www.mittalsteel.com, Mittal said he believes once the acquisition occurs his company’s world power will only grow.
The billionaire Mittal, who lives in Great Britain, was at Northwest Indiana’s Burns Harbor plant all day Tuesday and spoke to analysts on Wednesday in downtown Chicago.
He said no other company can beat the “unmatched scale” of Mittal Steel and envisions more acquisitions and further consolidation. Company leaders also outlined an aggressive capital expenditure program, but did not highlight any capital improvement projects locally.
ISG and Mittal officials said they’ve both led the industry in steel acquisitions and because of that expertise, believe the deal will go flawlessly.
“We could have an argument about which is the fastest growing company,’’ said Lou Schorsch, president and CEO of Ispat Inland. “The important thing is we both know how to do this. We really want to put together a best of the best companies.”
Schorsch said he and ISG CEO Rodney Mott, who will head Mittal’s U.S. operations, have established 10 task forces to be used for integration of the three local plants.
They also plan to share materials and operations closely with ISG’s Burns Harbor and Indiana Harbor and Ispat Inland.
One Mittal official said Ispat Inland could be considered the largest steel mill if you include ISG’s Indiana Harbor plant since only a canal separates the two mills.
Mittal and other steel executives said the key to the merger is that the company will remain diverse with plants plotted all across the map.
The combined company will have 33 blast furnaces. Company officials say with the merger an outage at a blast furnace won’t hurt as bad as in the past because steelmaking plants across the world can send materials to other mills.
Paul Gipson, president of United Steelworkers of America Local 6787 over the Burns Harbor plant, said he didn’t have a chance to talk with Mittal, but has researched the steel tycoon and is impressed.
“I’m telling you everything I’ve read about this guy is he’s a steel genius,’’ Gipson said. “He knows how to market a commodity.”
Gipson also maintains the strongest selling point to creating the gigantic merger with Mittal is the company’s access to raw materials.
“That was one of the weaknesses of ISG,’’ Gipson said. “They didn’t have the luxury of all of the resources they needed and had to pay a tremendous amount.”
Gipson said he was told that Mittal questioned every manager at ISG Burns Harbor asking about the operations and improvements.
“He’s going to manage his operations differently than any steel mogul in the past. He’s going to be more about profits than volume,” Gipson said. “He’s going to capture a lot of the market. I think some of the competition is going to be very nervous.”
The conference call was meant to provide more details to steel analysts, but analyst Charles Bradford said he didn’t learn anything new from the web broadcast about the new company.
“It was a total waste of time,’’ Bradford said. “The real things they have to talk about, they can’t get into until the two companies are merged. We don’t know what they’re going to do as far as personnel. We don’t know any of that.”
Mittal said the product mix remains diverse with hot rolled products, cold-rolled, galvanized, tin-plate, and automotive and electrical steel among other types.
“ISG has grown from a mere startup to one of the largest steel companies,’’ said ISG chairman Wilbur Ross. “The consolidation is changing the entire world steel map.”
