Stock price

After the acquisition, the stock price increase rapidly at 63 euro per share, but at the end of 2008, the stock price fell down less than 20 euro per share. For the reason, The net loss was due in large part to the US$4.3 billion charge the company took to write down the value of its assets in Europe, where steel demand has fallen by nearly a third since the global economic crisis set in. The company also took another US$1.3 billion in restructuring charges. ArcelorMittal had posted a net profit of US$2.3 billion in 2011. Sales fell by 10.4 percent to US$84.2 billion, with shipments of steel down 2.3 percent to 83.8 million tonnes. Iron ore shipments rose by 5.4 percent to 54.4 million tonnes, however, with over half shipped at market prices The company said it expected steel sales to improve this year, climbing 2-3 percent, with iron ore sales at market prices to rise by 20 percent. ArcelorMittal said this should help it increase operating profit in 2013. Although we expect the challenges to continue in 2013, largely due to the fragility of the European economy, we have recently seen some more positive indicators, said Mittal. These, along with the steps the company has taken to focus on its most competitive assets and reduce its net debt are expected to support an improvement in the profitability of our steel business this year. Financial analysis

The debt and assets increased or decreased at the same time in the same trends.

The debt/assets ratio has not changed a lot, but comparing to the ratio before acquisition, the ratio get increased a bit. So after the acquisition, there a little change in the financial structure. And the ratios are around 50%, it is a proper data.

According to the chart(from Bloomberg), the acquisition is done in June 2006, and we can get conclusion: 1. After the acquisition, the stock price increased rapidly, and the revenue and the cost of sales got increased at the same speed. After 2008, the net income decrease from 2008, especially in 2012, the net income is negative, because demand for steel fell further 8.8% 2. the acquisition is successful for it acqui 3. horizontal, hostile(Arcelor were not willing to be acquired by Mittal Steel), Arcelor was the number one company in terms of revenue in steel production and Mittal was number one in steel production. Mittal wanted to be the No.1 in the revenue, and it offered these conditions below: the 13 Mittal Steel shares plus 150.6 cash for 12 Arcelor shares Ability to elect to receive more cash or shares, subject to 31% cash and 69% stock paid in aggregate Very significant premium to Arcelors pre bid all time share price high 10.1% further improvement in the offer based on latest MT share price 7.0% further improvement in the offer based on 19 May revised offer Values Arcelor shares at 40.4 as at 23 June close 4. cash flow
Year 2006 2007 2008 2009 201 2011 201 2013 2014 2015 2016 2017 2018

0 Net cash flow(million) 4187 11084 9121 4873 707 3061

2 880 802.55 2115.89 2454.432 2847.142 3302.684 3831.11 4

The cost of the acquisition is 27 billion euro, we can forecast from the year 2013, the free cash flow, the discount factor is 10%. The net cash flow in 2013 and 2014 is forecast by the Bloomberg, we forecast the data in next years which has a increasing rate of 16% per year, for this rate should be larger than the discount factor 10%(WACC in the steel industy), after the calculation, in 2018, the NPVin 2018 = the net cash flow in the years from 2006(the acquisition year) acquisition cost = 688.49million 0 NPV in 2017 = - 421.25million, so in 2008, the acquisition cost will be get back.