IV.5. ArcelorMittal Case Study
Nowadays, ArcelorMittal is cross-listed on 5 European stock
exchanges, but also in the United States through ADR:
4 Euronext Amsterdam
4 Euronext Brussels
4 Euronext Paris
4 Bourse de Luxembour
4 BME Madrid
4 Nyse
According to ArcelorMittal, the multiple foreign cross-listings
allow the company
4 To have an access to the capital markets
4 To benefit from an more attractive financial profile towards
investors
4 To benefit from better liquidity for its shares
ArcelorMittal's five foreign cross-listings are the result of
successive merger and acquisition operations:
Initially, Mittal Steel was a Dutch company listed on
Euronext Amsterdam and on the Nyse, whereas Arcelor was an European company
with headquarters in Luxembourg. Arcelor's multi cross-listings were the result
of a previous merger (2002) between Usinor (listed on Euronext Paris), Arbed
(listed on Bourse de Luxembourg and on Euronext Brussels) and Aceralia (listed
on BME Madrid).
Following the Mittal's successful takeover bid on Arcelor in
2006, the newly formed group ArcelorMittal had required the admission of its
ordinary shares on Mittal's former listing places: Euronext Amsterdam and
Nyse.
Nowadays, in terms of traded volumes for the ArcelorMittal's
shares, Paris, Amsterdam and New York are the most important places,
respectively representing during the last 6-months 40.29%, 30.08% and
29.22%54 of the total volumes.
Volumes traded on Brussels, Luxembourg and Madrid are very
limited; each one gathering below 0.5% of the total volumes.
54
Sources: ThomsonReuters Datastream
#40: Distribution of the 6-Months Average Daily Volumes
Nyse
29.22%
Amsterdam
30.08%
Paris
40.29%
Madrid,
Brussels,
Luxembourg
below 0.5%
Source: ThomsonReuters Datastream, as of 28/10/2008
#41: Evolutions of the 6-months Average Volume
Distribution
between each Listing Places
23.48%
|
|
22.15%
|
36.58%
|
|
39.92%
|
38.88%
|
|
36.98%
|
April 2007 Oct. 2007
|
|
0.48%
|
|
0.28%
|
24.63%
|
|
33.48%
|
|
41.36%
|
|
|
April 2008 Oct. 2008
Jan. 2007
80%
60%
40%
20%
0%
35.27%
40.31%
21.45%
100%
2.87%
1.02%
0.92%
Paris Amsterdam Nyse Brussels Madrid Luxembourg
Source: ThomsonReuters Datastream as of 28/10/2008
Note: Brussels and Luxembourg accounts respectively for
0.12% and 0.0023% of the total volumes in October 2008.
#42: Free Float-Rotation and Variations of Share in the total
Volumes
between each Listing Places (Period 01/2007-10/2008)
|
Free-Float Rotation Variation of Volumes
Share
|
Amsterdam
|
0.47% -25.4%
|
|
Paris
|
0.63% +87.8%
|
|
Brussels
|
0.00%
|
+250.3%
|
|
Madrid
|
0.01%
|
-90.3%
|
|
Luxembourg
|
0.00%
|
-96.6%
|
|
New York
|
0.42%
|
-17.1%
|
|
|
Source: ThomsonReuters Datastream as of 28/10/2008
Since the merger of 2006, it is worth to notice the growing
weight hold by Paris in the total volumes at the expense of the other places,
more especially Euronext Amsterdam, the Nyse and BME Madrid (N.B: regarding its
negligible weight of 0.12% in the total volumes, we do not consider Euronext
Brussels and its +250.3%). This example illustrates the tendency enounced in
part IV.3.b. Current Tendency: the "Fading Listing", i.e. over the years more
and more investors tend to buy and to sell their shares on the most liquid
place.
#43: Breakdown of Institutional Investors in ArcelorMittal
U.K
23%
France
17%
North America
31%
Rest of Europe
19%
Belgium : 0.4% Spain : 0.2% Luxembourg : 0.1%
Rest of the World
3%
Netherlands
7%
Source: Thomson Financial
The liquidity attracting the liquidity, that is why the great
majority of investors prefer to trade the shares of a company on the main
trading market, which are, in the case of ArcelorMittal Paris and Amsterdam.
Since the merger between Nyse Group and Euronext (Paris, Amsterdam, Brussels
and Luxembourg) has probably facilitated the investments of American investors
directly on Euronext Paris.
According to the definition of an efficient foreign
cross-listing given in part IV.1. Empirical Determination of the Efficiency,
only three listing places present volumes above 5%: Paris, Amsterdam and New
York. Hence, there are no financial rationales of keeping the cross-listings in
Madrid, Brussels and Luxembourg, but the relevance concerning a complete
cross-delisting from these three last places is apparently not a topical
subject. Indeed as we stated in part I.3.b. Corporate Governance Motivations,
we have to take into consideration factors of "national sensibility" since the
company is the result of mergers of several national entities from Netherlands,
France, Spain, Luxembourg and Belgium. Hence, such delisting operations would
not be unfeasible in the future, but would be complicated by the fact of taking
into consideration the realpolitik, i.e. the governments' requirements.
Finally, even if the volumes in Amsterdam and in New York
continue to decrease, their figures are quite significant to remain above 5% in
a mid-term perspective. The question of delisting from these places is not
topical, but could become in the future if the tendency is confirmed.
#44: 25-Days Volatility of ArcelorMittal on its Different
Listing Places
2.0 1.8 1.6 1.4 1.2 1.0 0.8 0.6
|
|
|
|
0.4
0.2
|
|
|
|
Jan-07 Mar-07 May-07 Jul-07 Sep-07 Nov-07 Jan-08 Mar-08 May-08
Jul-08 Sep-08 Nov-08 Brussels Madrid Luxembourg New York Amsterdam Paris
Source: ThomsonReuters Datastream as of 28/10/2008
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