Let me tell you about the very rich. They are different from you and me.
“I was in Jakarta last week,” says Aditya Mittal. “I had a meeting with the
president at 5pm, and I had to decide whether to go to Hanoi, Kuala Lumpur
or Singapore afterwards, and I was driving the flight crew [of Mittal’s
private jet] mad.
“So after my meeting, I say to the crew, hey, we’ll do dinner in Kuala Lumpur,
then take off for Hanoi. I have a nice dinner, then at 1am the crew tell me
we have a problem, the immigration guys have gone to sleep in Vietnam, but
it’s okay, we can land and they will give me a police escort to my hotel
room, stand outside all night, then send in immigration in the morning to
stamp my passport.”
Aditya Mittal smiles. He is a billionaire’s boy with serious ambition.
Charming, articulate and handsome, with round brown eyes that mask a degree
of calculation, he is already seen as likely successor to his father Lakshmi
at the steel giant they created two years ago by merging their
family-controlled firm with European rival Arcelor.
That combined entity, Arcelor Mittal, in which the Mittal family owns a 45%
stake, is now the biggest steel group in the world. And Aditya, trained at
Wharton Business School and Credit Suisse First Boston in New York, sits as
finance director, head of mergers and acquisitions (M&A), and
management-board member responsible for flat-steel products, Americas. He is
only 32.
For others in the steel industry, he has been a surprise. Travelling
side-by-side with his father for the past decade, he has kept his head down,
worked the deals, brushed off the accusations of nepotism and helped drive
the expansion that has left the Mittals’ rivals in their wake.
In recent years, his ambition may even have outstripped his father’s. He
suggested, and then led, what became the hostile bid for Arcelor, and later
ran its integration. So much for a life of Gatsby-style indolence. He has
probably headed more acquisitions than any young man alive.
“I’ve personally been involved in 20, but in charge of about 50,” he says. He
keeps a folder on his desk of potential takeovers, 80 pages thick, three
deals to a page. “Yeah,” he says, “that’s the number of global
opportunities.” If, as some believe, Mittal senior shifts his focus to oil
and gas, the son may take the top slot at Arcelor Mittal soon.
Sitting in a seventh-floor meeting room at the family’s offices overlooking
London’s Berkeley Square, Mittal looks unflustered by any speculation.
Boyish in build, barely filling his tailored suit, he wears no watch or
cufflinks, and speaks English softly with both Indian and American
intonation.
That unreadable exterior is consistent with the family style, where the jets,
the world-leader powwows and London’s most expensive home – bought by
Lakshmi Mittal for £57m in Kensington – are balanced against a serious sense
of purpose, both in business and philanthropy.
Those outside the steel industry had barely registered Mittal junior until
this month, when Aditya and his wife, who already have two daughters, gave
£15m to Great Ormand Street Hospital. It was the single biggest donation the
hospital had ever received.
Because they wanted the headlines? No, he says, because they experienced its
level of care, and they felt a debt of honour. “But my wife will kill me if
I say any more,” he adds. You can work out the rest for yourself.
This is the time of year when the Mittals feel the spotlight. The Sunday Times
Rich List will shortly reconfirm the family’s status as the richest in
Britain – resident here, though they hold Indian passports.
Perhaps that’s why Lakshmi Mittal was on Radio 4’s Today programme last week,
discussing the world economy, just days after Aditya invited me in. There is
a sense that they want to stop the money getting in the way of the business.
And what a business. Arcelor Mittal is three times the size of its nearest
rival, Nippon Steel, and still pushing on. Built on the initial gamble of
snapping up assets in the last steel slump, the empire is driven by the
Mittals’ vision that only a truly global, vertically integrated, steel
business can better withstand economic and customer squeezes.
Why them? Because others didn’t see the opportunity. “The Americans missed the
boat,” says Mittal simply. “They were comfortable domestically and saw no
need to alter the way they were working.”
Mittal steel is now in our cars, our appliances, our buildings and bridges
worldwide. Arcelor Mittal beams are being used to build New York’s Freedom
Tower.
And Aditya, Lakshmi’s only son – a daughter, Vanisha, also sits on the Arcelor
Mittal board – has played his part in getting it all under family control,
helping devise the early deals that bought rust-bucket steel mills and
turned them into profitable businesses.
Many were bought with “sellers’ credit”, allowing the Mittals to pay back the
purchase price over a number of years. It also meant Aditya learnt the
mechanics of acquisition quickly – even if many sellers thought him too
young to be taken seriously.
“But I made sure the people who did the due diligence were the most
experienced we had,” says Mittal, “and I challenged them, so I was always
comfortable that the plan I was presenting was robust.”
He may have influenced more than acquisitions, too. He joined his father, he
says, only on condition that the Mittals’ steel interests were listed. “I
had no interest in working for a private company.”
He has been proving himself ever since, he says, because the rise of the
boss’s son is never easily accepted by colleagues. “They want to test you
all the time.”
How? “By giving you the most difficult projects,” grins Mittal. So he helped
run the public offering, and headed M&A – mainly because so many people
had left to take start-up and financing jobs in the internet boom. He also
helped resolve the disquiet over assets that were being bought privately by
the Mittals, whenever their public vehicle passed on the opportunity.
The City has painful memories of entrepreneurs juggling public and private –
Robert Maxwell, for one. Mittal is probably too young to remember that.
He shrugs when I put it to him. “Once the company had the capability to buy
them back, we transferred them,” he says.
But that, and issues of corporate governance, and even the Mittals’ Indian
ethnicity, became battering points during that difficult bid for Arcelor,
Europe’s steelmaking champion. Mittal says the issues of governance are
resolved. The rest was just laughable.
Others say both father and son were clever in not responding to the jibes.
“That was smart,” says Wilbur Ross, the steel boss who sold the Mittals his
ISG group in 2004, and now sits on Arcelor Mittal’s board. “It made it
easier to establish relationships afterwards.”
Yet despite promising to put in an Arcelor man as chief executive of the
combined entity, within three months Lakshmi Mittal took the helm. They
welched on their word?
“Bullshit,” says Aditya, suddenly stern. “Roland Junck” – appointed to the job
initially – “couldn’t do the job so he resigned, the pressure was too much.
And if you asked him, he would agree.”
Are there still tensions within the business? “No, we are one, unified
company.” The IT is not harmonised yet, but there is strong coordination in
commercial approach, and staff share knowledge on a continual basis.
Is it threatened by economic downturn? Less so, because of its size and
spread, he says. “We have debt of $22 billion (£11 billion) but an ebitda of
$19 billion, we have 27 production facilities, a very diverse product
offering . . .” He rattles out the numbers.
There are specific problems in areas like Kazakhstan, he admits, where its
coalmines have seen repeated fatalities. “We need to fix that, but it
requires huge change. For every 20 to 30 people we employ in Kazakh mines,
western mines would employ two or three.” So why not close the mines till
they can be mechanised? “What about the 30,000 people who work there?”
counters Mittal. “That’s the issue. We’re rolling out a modernisation
programme but there’s a global order backlog for equipment.”
It’s hard to unsettle him. Mittal is equally quick to dismiss stories of a
family feud with his uncles in India.
Lakshmi, born in 1950, separated from his father and two younger brothers to
establish his empire abroad. Now there are suggestions Arcelor Mittal wants
to gobble up some of the brothers’ steel operations outside India.
“We get on really well,” says Mittal. “One uncle lives in London as does my
grandfather. We see them. There’s no split.”
But it’s interesting that his relationship with his father thus far has taken
a different course. Advisers who have witnessed the tight bond between the
two say Aditya provides an eye for detail that underpins Lakshmi’s
entrepreneurial brio.
“Aditya’s a first-class strategist and financier, able to master the big
picture and the technical details,” says Yoel Zaoui, Goldman Sachs’ head of
European investment banking. “The relationship is based on complementarity
and competence.”
Others are surprised how often Lakshmi defers to Aditya. Perhaps Mittal senior
is sensitive about giving his son some headway?
Aditya Mittal nods. “You hope one generation learns from another’s mistakes. I
am my own man. So long as I am doing what I want, and it works for him and
me, it’s perfect.”
That trust was fostered by an upbringing where Aditya stayed close to his
father’s side, visiting steel plants with him, living near the business in
Indonesia where Lakshmi started his operations.
Unlike many entrepreneurs’ children, he never lost his father to business – he
was taken along for the ride. And Lakshmi, say those around him, is good at
making business fun.
But father-son bonds make family-owned firms difficult for everyone else, not
least colleagues and other shareholders. Can it be a meritocracy? Is that
why he calls his father Mr Mittal?
Aditya grins. “Well, I could hardly call him Papa in the office, could I?”
There may be other stresses looming. This Mittal admits he has itchy feet. He
doesn’t envisage staying in Europe for the next 20 years. Arcelor Mittal,
with bases round the world, could accommodate that. But might he leave? “I
am open to opportunities,” he says, teasingly.
Is he trying to keep his dad on his mettle? He laughs. “No, but at some point
I may want to do something completely different, like dedicate my life to
philanthropy.”
Really? Because that’s a better use of his talents? He doesn’t say. But
Arcelor Mittal is powering into India now – “it’s our No 1 priority” – and
he has plans to bankroll a string of health centres there to reduce infant
mortality. His wife, a former Goldmans Sachs banker, will coordinate future
giving.
Some think it unlikely he can leave the business. His experience makes him too
valuable. China is the next target after India. Arcelor Mittal’s directors
know who has the connections, and the ambition.
“If anything happened to Lakshmi, I think it’s 100% obvious the board would
pick Aditya to run the business,” says Ross bluntly.
Such expectations are the reason why Mittal’s life is mapped out differently
to the rest of us. The question is, what if it ceases to be his choice?
VITAL STATISTICS
Born: January 22, 1976
Marital status: married, two daughters
School: International School, Jakarta
University: Wharton Business School, Pennsylvania
First job: mergers and acquisitions banker, Credit Suisse First Boston
Salary package: £650,000 plus bonus. His family wealth was estimated at £19
billion last year
Home: Belgravia, London
Car: blue Mercedes SL
Favourite book: The Kite Runner
Favourite music: R&B
Favourite film: V for Vendetta
Last holiday: St Moritz
ADITYA MITTAL’S WORKING DAY
The Arcelor Mittal finance director is woken at 7am by his daughters at his
Belgravia home. “I check the e-mails, eat breakfast and get driven to
Berkeley Square before 9.30am,” says Aditya Mittal. He goes into meetings
about acquisitions, and liaises with executives around the world. He keeps a
bag of clothes in the office, so he can fly anywhere at short notice. “The
key is to be reactive. If you are slow, you don’t get deals.”
He often eats lunch with his father – food is brought in from Lakshmi Mittal’s
Kensington home – and works until early evening. “I put my daughters to bed,
then go for a run or play squash.”
DOWNTIME
Aditya Mittal relaxes by playing sport. “Whether it’s skiing, squash, marathon
training – I find it the ultimate relaxation. Otherwise I just like reading
a good book, watching a good film or spending time with the family.” He used
to drive sports cars, and often eats out at Italian and Chinese restaurants,
but now prefers not to spend too much.
“The family has lots of nice assets like a boat, a plane and a house in St
Moritz, so I enjoy them. But when you have money, you don’t have the need to
show you are successful all the time. If I had a choice, I’d spend most of
my money helping others.”
