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Racism hindering Mittal's Arcelor bid?

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February 15, 2006 17:36 IST

Billionaire businessman Lakshmi Narain Mittal has long been looked upon as the 'King of Steel'.

His company certainly holds the crown in terms of volume, but the only thing in the way of its clearly becoming the world's biggest force in the steel sector is the French company, Arcelor.

Some days ago, Mittal Steel tried to change that. It made an audacious Euro18.6 billion (over $22 billion) hostile bid for Arcelor. If the deal went through, it would be the steel industry's biggest merger. The result would have been a company with an output three times greater than its nearest rival, and annual net profits of $7.2 billion.

But the proposed tie-up has failed to go through, so far. There is fierce opposition from the Arcelor board, as well as several European politicians. In London, a columnist for The Guardian spoke of how the bid unleashed a new wave of 'economic patriotism,' adding that Mittal and his family were often portrayed as aliens -- 'the Indians' -- rather than as global entrepreneurs.

Do you think the bid betrays the developed world's double-standards? While calling for higher foreign investment in the emerging world, it is still unprepared to open its own markets to the buying power of a foreign company. Arcelor French Chief Executive Guy Dolle went so far as to compare his company's steel to perfume, and Mittal's to mere eau de cologne.

India has accused European governments of discrimination and warned that their intervention could derail fragile global trade talks. Do you agree with the government's stance? Is the rejection of the Mittal bid a clear indication of racism? Or is this just about one company refusing to sell out to another? Tell us what you think.