On 27 January 2006, the Indian group Mittal Steel launched a takeover bid on Arcelor. The bid shook the European political and industrial spheres, setting off a debate on globalization.

The French press followed the story throughout February, reporting on the different reactions of the politicians, industry and union leaders and even some employees. Judging by the analysis of the economic press, the cultural differences between Arcelor and Mittal Steel appear rather tenuous despite France's attempt to prove otherwise. In fact, according to some people, the CGT (trade union) in Lorraine found Mittal's social policy to be quite tempting. Is the takeover then not the horror story it has been made out to be?

The French government does not see it this way however. Arcelor is considered the gem of European steel and the French and European politicians intend to protect the company from any takeover. Lakshmi Mittal, CEO of Mittal Steel, has been suspected of wrongful intentions. What decision will be made on the salaries? Will they lay off workers? Etc. Anxious to get the support of European investors, Mr Mittal has been open about his intentions and even went on a tour of Europe. But if the commentaries in the press and other reactions are anything to go by, the battle is not over yet.

The press also reported on the mounting tension in France. It appears that the political parties were taken by surprise and they denounced the " brutal" way the takeover bid was launched, with no respect for " set rules". The press brought up the Danone case, where the government had suggested giving tax incentives to the shareholders in order to protect companies from takeover bids. The affair even perturbed President Chirac's trip while he was in India; he said that Arcelor was based in Luxembourg, not France…

Above and beyond questions on Arcelor's future, the press queries what is at stake in takeover bids and the way to "legally" stop them; what lies ahead for French and European companies? Should such practices be prohibited? Is it possible to do what the Japanese have done and outlaw takeovers? How will the European Commission react to such a proposition? What role would the French governement play? These questions must be answered as this takeover bid is not the first one and, as the press noted, will not be the last. A few journalists reported that recent takeover bids had rekindled the question of patriotism.

War has been declared and the battle is far from over. The question remains: is Mittal Steel's takeover bid indicative of a new form of globalization?

Sylvie Testard-Ramirez Managing Director, Echo Research France
Analysis and commentary by Echo Research on the basis of 886 articles which appeared in the national daily press online.