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  • The colour of money

    by Rohin
    14th February, 2006 at 1:28 am    

    More Euro-blogging from me. The Indian press has been awash with coverage of their poster boy’s European takeover bid. Laxmi Mittal’s hostile bid for French steel giant Arcelor has run into serious difficulty and both sides are crying foul. However, now many Indians are claiming the reason the Europeans are stalling is simple racism. Paranoia or justified claim?

    France and Luxembourg certainly seem to have peppered their criticisms of Mittal’s plans with a nationalistic fervour, likening Mittal Steel to cheap cologne and Arcelor to perfume. Even more shocking is a cartoon I just saw on TV (and will try to find) from a French newspaper which stood an Arab-looking figure next to two Frenchmen and carried the caption:

    “Merde! Mahomet a acheté Arcelor!” (Shit! Mohammed has bought Arcelor!)

    Yes, I know it makes no sense. It does, however, seem vaguely racist. Perhaps the paper thought that what with all this anti-Islam cartoon protesting, they could work in some anti-Mittal sentiments. It is idiotic at best and highly offensive at worst.

    The opposition to Mittal’s bid was raised by industries minister Kamal Nath with Peter Mandelson, the EU trade commissioner. Whilst Mittal has not made any public statements on the obstacles he is facing, the owner of Bajaj Auto, Rahul Bajaj, has pulled no punches, accusing the Europeans of parochial nationalism [Link]. Nath himself warned European governments against racist reactions, according to the FT.

    Luxebourg’s Grand Duchy has rushed through a bill on takeovers, which could protect Arcelor. Whether they would have done this had somebody else been spearheading the takeover, I cannot say. The Times said:

    “[Arcelor] ordered the hiring of some private detectives to dig dirt on Mittal, just in case Dolle [Guy Dolle, chief executive, Arcelor] runs out of groggy xenophobia to sling at the Asian billionaire.”

    Manmohan Singh is set to raise the issue with Jacques Chirac during the French Prez’s visit to India next week.

                  Post to

    Filed in: Economics,India,Race politics

    35 Comments below   |  

    Reactions: Twitter, blogs

    1. Peter — on 14th February, 2006 at 9:14 am  


      Arcelor was formed from a merger of three steel companies, of which ARBED from Luxembourg was (I think) the largest part.

      The head office of ARCELOR is in Luxembourg, and a substantial employer and tax-payer.

      I see that Mittal have suggested that they would move their headquarters to Luxembourg - a good move to placate the Luxemburgers.

      Luxembourg is reasonalby multi-cultural. I don’t think that race is a big issue for most people - but there is bound to be a minority that sees things in these terms.

      Even if Mittal does promise to go to Luxembourg, the Luxembourg government is bound to worry that their influence will be diluted (they currently own 5% of the company) and that next itme around, Luxembourg will lose its historic links to the siron and steel business.

      My guess is that the deal will go through (but don’t treat this as a share tip).

    2. Jay Singh — on 14th February, 2006 at 9:34 am  

      That French cartoon seems to plumb new depths of crass ignorant idiocy - amazing.

    3. El Cid — on 14th February, 2006 at 12:12 pm  

      Believe me, the opposition would be just as big if the buyers were American. (see Danone)
      Yes, it is paranoia, in part. There is an element of xenophobia but it is not a question of skin colour.
      Playing the race card isn’t going help.
      Old europe is old europe because it has a long standing tradition of state interference in these matters. You gotta remember that the three-way merger that brought Arcelor into existence was itself state-guided.
      These industries are instictively seen as national interests and are political hot potatoes because of the number of people they employ.
      UK, on the other hand, has long been a champion of free trade.
      Hence our utilities are run by Frenchies, our investment banks have been snapped up by Germans and Americans. Harrods owned by Egyptian. Chelsea a Russia. Even the Spanish have got in on the act of late: Abbey, BAA, O2.
      And hence Europe’s booming M&A markets are dominated by cross-border buying of British assets.

    4. coruja — on 14th February, 2006 at 12:58 pm  

      Not ‘racism’, just good old fashioned European xenophobia.

      Intrestingly El Cid’s list contained what are manily pan-european M&As. Having a country’s utilities&/ main industries to be part/fully owned by another European company is a completely different to it being owned by a ‘non-European’ company. There cannot be many instances.

    5. Jay Singh — on 14th February, 2006 at 1:14 pm  


      It is xenophobia with a gallic racist twitch. Mittal is a Hindu from India originally, based in the UK. It could have been a cartoon satirising a British company, or a generic multinational. Instead, it caricatured his company as an Arab, and a Muslim, using the common name for all Muslim, Mohammad. I suppose Abdul would have done just as well.


      Foreign —-> brown skin *light bulb goes off in head* ergo Muslim —-> shifty Arab (Indians? Arabs? Hindus? Muslims? Whats the difference?)

      On so many levels it is a stupid and racist caricature. Representing a multi billion pound global company in these kind of terms reveals a nasty streak. It is really pathetic. The grubby dark man come to defile our virginal industry. If the instinct is the protection of a state industry being violated, fine, but the caricature goes much much deeper than that.

    6. Jay Singh — on 14th February, 2006 at 1:31 pm  

      I mean, why bring the boss of the company’s race into the equation? (and then mash it up in the stupidest, dumbest, most outrageous caricature getting his race and religion wrong, compounding the moronitude?)

      Racist as a redneck in white sheets.

    7. Sunny — on 14th February, 2006 at 1:57 pm  

      I’m inclined to agree with El Cid. Europeans have always had an aversion to outside people, including Americans, and the states are loathe to give up control. But there does seem to be a bit underhand abou this too…. regardless, I think Mittal is not going to give up the prize so easily. It’ll be an interesting battle.

    8. El Cid — on 14th February, 2006 at 2:16 pm  

      with all due respects, but Europe is SUPPOSED to be a single market where the flow of capital, in theory, is meant to run freely. And yet it doesn’t . For example ABN Amro and BBVA tried to buy some Italian banks last year and that fell through due to interference.

      Jay, don’t judge informed and uninformed European business opinion by that caricature alone. I mean, it so crass and dumb — the cartoon, that is. It’s like me saying “behead all those who insult Islam” was representative. Let’s put the damn drawing aside

    9. El Cid — on 14th February, 2006 at 2:25 pm  

      Mittal report earnings report tomorrow. Let’s see what he says. The odds still favour him winning, but he will probably have to improve his bid.
      Arcelor report on Thursday

    10. Bea — on 14th February, 2006 at 2:57 pm  

      In my view, El Cid is right regarding it not being a racial/skin colour issue. Mittal after all, already has taken over some steel mills in Eastern Europe.
      Belgium is sitting tight looking for signs but not against the bid. France and Spain have stake in Arcelor and they won’t let go until they have something to gain from this takeover. Having genuine concerns about the fears of job losses is understandable. They are not gonna let the merging of the largest steel giant in Europe( after Mittal) go ahead without kicking a fuss. That’ll just make it too easy.
      Caricature nonsense is probably just plain dumb try at spin to form public opinion and the opinions of the shareholders and give them a cause for concern. BTW did you find out which newspaper was it?

    11. Jay Singh — on 14th February, 2006 at 3:05 pm  

      El Cid

      I was only talking about the cartoon - didnt say anything about European business culture at all.

    12. ContraryMary — on 14th February, 2006 at 3:16 pm  

      the cartoon’s disgusting and quite amazing in terms of sheer ignorance. however Mr Laxmi Mittal is no angel at all. in fact he’s widely regarded as being guilty of shall we say ‘sharp practices’ to put it mildly.

      this kind of battle is going to be increasingly prevalent as Indian and Chinese businesses and entrepreneurs rise and buy out Western companies. (for eg IBM going to a chinese company). the west’s reaction to this is generally that they’re smarting at being over-taken and usurped by former colonies.

    13. risc — on 14th February, 2006 at 3:21 pm  

      Old europe needs to open up it’s eyes. It can continue to act and behave like it’s an imperial power. We (west) preached globolisation and now when it comes around we cant shot foul or play politics. China and south asia once not to long ago where the richest places and returning to that position. You either change or die.

    14. El Cid — on 14th February, 2006 at 3:30 pm  

      I wouldn’t generalise about Asia either. It ain’t all one great big Hong Kong.
      Foreign investment is welcomed to varying degrees across the region.

    15. ContraryMary — on 14th February, 2006 at 3:55 pm  

      risc - you have hit the nail on the head

    16. El Cid — on 14th February, 2006 at 4:10 pm  

      I dunno about colonies. You can take the imperial angle too far. I dont remember Luxembourg having a stake in India!!
      Still, there is something in what risc says, only Cold War-type thinking was the main non-business obstacle that I can recall in recent months. I suggest you Google Unocal + China.

    17. Sunny — on 14th February, 2006 at 4:31 pm  

      That Unocal episode was hilarious. The Americans are constantly getting ‘yellow fever’.

    18. risc — on 14th February, 2006 at 4:40 pm  

      This is whats going to happen. Far east and South Asia have understood globolisation and now going to take us on. They earn less, worker longer hours and quality of products/services just as good in most instances. To compete we have to be more productive US/UK doing this just ask the chancelor.

      Old Europe especially the french want to continue living with current perks like half the weak off, cows being subsidised by EU CAP more than what most of the population in developing countries earn. It’s just not sustainable. We have to compete in a global economy and the goverment cant keep you subsidised forever if they do well thats not free trade so egg on face.

    19. Asma' bint Marwan — on 14th February, 2006 at 8:10 pm  

      Lighten up Jay, it was just a cartoon, you know humor, ha, ha, ha! Are you going to torch the French Embassy for this outrage?

      I think the reason why the descendants of Charles Martel are against Mr. Mittal’s takeover bid of Arcelor is far simpler and less sinister than some of the more excitable posts here. I buy Paris Match every week and the magazine covered his daughters wedding at Versailles quite extensively. All I could say, and I believe 90% of the French (the ghoras) were with me on this one, is that he smells of new money and he is vulgar, even worse than Posh and Becks. He’s a billionaire brown chav.

    20. Petals just fell from heaven — on 14th February, 2006 at 8:22 pm  

      So the Indians are on a global mission to rule, can’t go amiss with the genetic business acumen,eh?

    21. Jay Singh — on 14th February, 2006 at 8:43 pm  

      I’m as light as a cloud dude! And that wasnt a joke. Jokes have to be funny. Racist jokes are just chewing gum for vulgarian wart-hogs like yourself.

      And anyway, when I want to have a laugh I just read your posts.

      toodle pip!

    22. Asma' bint Marwan — on 14th February, 2006 at 8:57 pm  

      I’ll take it your still angry and the French ambassador should be very wary. I hope your parents keep the matches out of your reach.

    23. Jay Singh — on 14th February, 2006 at 8:59 pm  

      Mon cherie Asma

      What’s the obsession with fire dude? Are you a pyromaniac or something? Are your underpants aflame? :-)

    24. Asma' bint Marwan — on 14th February, 2006 at 9:26 pm  

      No obsession Jay. But forgive me, fire has been on my mind of late, with all those Scandinavian embassies going up in flames last week.

      I heard today that the Chilean embassy was torched along with that of Denmark and Norway. Are Chileans considered Scandinavians in the Muslim world? Or as the great Taki wrote this week maybe Augusto Pinochet is related to Olaf Palms?

    25. Jay Singh — on 14th February, 2006 at 9:32 pm  


      Why you asking me? (clue: I am not Muslim) :-)

      Who set your underpants on fire?

    26. Rohin — on 14th February, 2006 at 10:19 pm  

      Brown chav? Come on. I’ve never understood the asinine dislike of ‘new money’. The label ‘nouveau riche’ or new money applies to a particular type of person, the crass and tasteless type who flash their cash in a garish manner. Mittal is nothing of the sort, with the exception of his daughter’s wedding (if spending lots on your baby’s wedding is new money then all Indians are), what else do you base the accusation on?

      And if Paris Match is not racist, does that automatically mean Arcelor aren’t either? What logic is this? For the record, I don’t think Arcelor are motivated by racism, I think they’d treat any non-European in a similar manner, but don’t try to excuse all European xenophobia because a gossip rag covered the biggest wedding of the decade.

      I have quite a different stance. That family started from literally nothing in Calcutta, the man is a self-made billionaire and has nothing but my respect. I’d much rather have him putting Indians on the map than Aishwariya and co. Quit the petty jealousy.

    27. Asma' bint Marwan — on 14th February, 2006 at 10:35 pm  

      He spent over 25 million quid for his daughters big day. That tidy sum could have fed the whole sub-continent for a few months. I have also seen him in a few more glossys, a few pics were of him down in Marbela partying with his good Greek friend Taki Theodoracopoulos (of Spectator fame) Your idol was wearing the tiniest speedo and his fingers were covered with bling. So I’m sorry, I am repelled by this upstart. I’m convinced if the lovely Aishwariya was bidding for Arcelor, the French being who they are would have no problem selling the company to her.

    28. Jay Singh — on 14th February, 2006 at 11:07 pm  

      Your idol was wearing the tiniest speedo and his fingers were covered with bling

      Did it make you feel horny, Asma? :-)

    29. Sunny — on 15th February, 2006 at 1:24 am  

      So I’m sorry, I am repelled by this upstart.

      Upstart? I’m no Mittal fan but the guy has spent decades building up steel businesses, turning around old inefficient ones and consolidating the market.

      If anything, he’s a very astute businessman. Upstarts would be the 30yr old Russianoligarchs with sudden Billions in paper money.

      If you’re going to hide that smattering of xenophobia, atleast do it behind believable rhetoric,

    30. Asma Bint Marwan — on 15th February, 2006 at 1:47 am  

      xenophobia, qui moi?

      My wife is Pakistani, I don’t have a racist bone in my body.

    31. Siddharth — on 15th February, 2006 at 8:06 am  

      I’m convinced if the lovely Aishwariya was bidding for Arcelor, the French being who they are would have no problem selling the company to her.

      Well, I was willing to take you seriously. Then you went and posted that and I realised we’re dealing with another axe-grinding HP-reject. All trolled up and no one to blow.

    32. Peter — on 15th February, 2006 at 8:22 am  

      Mittal does own some assets in Luxembourg already - and has been talking about closing them down.

    33. Jai — on 15th February, 2006 at 11:48 am  

      Breaking News for Asma:

      If you see the name “Singh” in someone’s handle, they are not Muslim.

      Jokes about “burning embassies” and so on are therefore as relevant in these cases as they would be if directed at (for example) Buddhists or Jewish people.

      As I’ve said repeatedly before, not all South Asians are Muslim (actually, the vast majority are not).

    34. Gopal — on 21st February, 2006 at 4:17 am  

      Hey! Irrespective of caste, creed, race or color- money is green! and in the end, replace the n with d- and ergo! Everyone’s happy- Arcelor has a solid market to launch from at the moment and this type of posturing is very common, just to up the ante and perhaps, fetch a higher price for the shares. And to think of all of us arguing with each other- hey, how does the acquisition affect you or me? Life goes on!! Grow up, please

    35. Astonio Magrnetinia — on 3rd March, 2006 at 6:53 am  

      Did anybody know that warren buffet owns 2 percent of mittal steel shares, and he may put in some serious cash to drown guy dolle, the french and the opposition to mittal’s take over.

      Buffet has some serious cash, no luxemborg or french bureaucratics want to mess with that .and apparently he is doing the rounds for mittal among institutional shareholders.

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