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Mittal's bid could still be derailed. Financial markets bubbled over with rumors that Arcelor was looking for a rescuer, possibly a Japanese firm who would put in a higher offer, although no such "white knight" had emerged by the end of the week. Mittal also needs to convince investors that his bid, which consists mainly of Mittal Steel stock with some cash, is good for them. Mittal Steel has what many see as a financial weak point: its corporate governance structure, which locks in Mittal family control. Lakshmi's son Aditya, 29, is president and ceo of the company, and his daughter Vanisha, 24, is also on the board. The family's current holding of 88% of Mittal stock is set to drop to just above 50% if the deal is concluded. But the Mittals will continue to have a big controlling majority because of a dual stock structure.
It's not hard to see why Mittal should feel so strongly about retaining family control. Money is in his name: Lakshmi is the Hindu goddess of wealth. But former neighbors say he was born almost penniless, growing up in Sadulpur, a small Rajasthani town in an area of thorn trees and sand dunes in western India, in a house built by his grandfather. The extended family of 20 lived on bare concrete floors, slept on rope beds and cooked on an open fire in the brick yard. "They didn't have any income," says Sushil Kumar Saraogi, 61, editor of the weekly Sadulpur Times. "They scraped by on what the father had managed to rescue. They were very poor." Shankar Lal Saraogi, 78, Mittal's uncle, adds: "They weren't considered a prestigious family. Very ordinary, in fact."
The Mittals quickly moved on — and up. They belong to the Marwari caste, well-known in India for being traders and moneylenders who figure prominently in the leading business houses of India. The family left for Calcutta, a center of Marwari activity, where father Mohan Mittal became a partner in a steel company. Lakshmi graduated with a business degree from the élite St. Xavier's College in 1969 and joined his father's firm before branching out on his own. "He was very strong in numbers," recalls Sisir Bajoria, a fellow Xavier's student. Mittal split from his father and two younger brothers in 1994 for reasons they don't discuss. He took the international arm, with interests in Indonesia and Trinidad and Tobago, and the rest of the family kept the domestic Indian business. Since then, Mittal has left the other side of the family behind. Over the past five years he has made about 20 acquisitions, buying up a network of steel producers in former communist countries including Kazakhstan, Romania and Ukraine, and pushing into the U.S. in 2004 with the $4.5 billion purchase of International Steel Group. His empire now has more than 175,000 employees and spans the globe. Last year, he set up shop in India for the first time, agreeing to build a new factory in the northeastern state of Jharkhand.
With business success has come wealth and opulence. He acquired the Kensington mansion, said to be the world's most expensive home, from Formula One racing's Bernie Ecclestone two years ago. And in 2004, he and his family made headlines around the globe when he threw a $50 million wedding bash for daughter Vanisha. It included an engagement ceremony at Paris' Tuileries Gardens featuring parrots and a tiger; an opera and banquet at the French royal palace at Versailles; and a Kylie Minogue concert and sit-down dinner at the 17th century Vaux le Vicomte Chateau, where chefs from Calcutta served 1,000 guests on china monogrammed with the initials of the bride and groom, hers in pink, his in blue.
While he's a hero in his native country, Mittal had to move fast last week to counteract attempts in parts of Europe to paint him as a villain. He spent most of the week shuttling in his private jet from European capital to European capital, including three trips to Paris, to explain his motives and promise he wouldn't cut European jobs. Governments have limited formal means to stop the Arcelor deal, as 85% of the company is traded freely on the stock market. Nonetheless, they and labor unions can make life hard for Mittal, who still needs to get E.U. antitrust clearance for the deal. The French government has used its political muscle to block takeovers in the past, including an attempt in 2004 by Germany's Siemens to acquire some operations of its ailing French rival Alstom. But the government's control over privately held companies is much more limited. On New Year's Eve, Paris published a list of 11 strategic industries that it wants to protect from takeovers; they include some biotechnology research and casinos but not, surprisingly, steel.
Antitrust clearance may take several months, but early indications are that it may not pose a huge problem. The combined company would be three times the size of its nearest competitors, with a 10% share of the world steel market, but Mittal and Arcelor don't have many territorial or product overlaps that could cause problems with regulators. Hermann Reith, analyst with BHF-Bank in Frankfurt, says he reckons the chances of the deal going through are now more than 50%. "We will look at this issue, as always, very carefully on competition grounds only. The regulation gives us no power to question mergers for other reasons," said Neelie Kroes, the E.U.'s Antitrust Commissioner. She added: "I am against national champions. And against European champions. But I am for global champions based in Europe."
The irony of this fight is that Mittal and Dollé both share a similar vision about the future of steel. Both are trying to build themselves up as Europe-based global titans, believing that a worldwide consolidation is necessary to bring stability and sustainability to a volatile industry. Mittal has long argued that the industry's future will brighten if several huge players emerge from the scrappy pack of smaller firms. "Steel will always remain a cyclical industry," he told Time. "But if we are strong in financial health and stick with our principles and vision, we will reduce the effect of the volatility."
Despite the acrimony on display last week, Mittal says he remains "good friends" with Dollé. "I admire him as a leader. It's nothing personal." But dinner is dinner, and business is business.