1. Why is it important to establish both top-down (i.e., provided by top management) and bottom-up (provided by operating units) estimates of synergy?
2. How did ArcelorMittal attempt to bridge cultural differences during the integration? Be specific.
3. Why are communication plans so important? What methods did ArcelorMittal employ to achieve these objectives? Be specific.
4. Comment on ArcelorMittal management’s belief that the cultural diversity within the combined firms was an advantage. Be specific.
5. The formal phase of the postmerger integration period was to be completed within six months. Why do you believe that ArcelorMittal’s management was eager to integrate the two businesses rapidly? Be specific. What integration activities were to extend beyond the proposed six-month integration period?

The merger of Arcelor and Mittal into ArcelorMittal in June 2006 resulted in the creation of the world’s largest steel company. With 2007 revenues of $105 billion and its steel production accounting for about 10% of global output, the behemoth has 320,000 employees in 60 countries, and it is a global leader in all its target markets. Arcelor was a product of three European steel companies (Arbed, Aceralia, and Usinor). Similarly, Mittal resulted from a series of international acquisitions. The two firms’ downstream (raw material) and upstream (distribution) operations proved to be highly complementary, with Mittal owning much of its iron ore and coal reserves and Arcelor having extensive distribution and service center operations. Like most mergers, ArcelorMittal faced the challenge of integrating management teams; sales, marketing, and product functions; production facilities; and purchasing operations. Unlike many mergers involving direct competitors, a relatively small portion of the cost savings would come from eliminating duplicate functions and operations.