Like two lumbering elephants at the start of the mating season, Wal-Mart and the Government of India are eyeing each other, a little hungrily, a little warily. The dance has begun, and though the ultimate outcome seems clear, the process to get there could be plenty circuitous. HereÂ’s a Standard & PoorÂ’s update, published this month on the Business Week website:

Wal-Mart stated on Feb. 2 that it has applied to create a separate entity in Bangalore devoted to “market research and business development in relationship to the retail industry in India.”

“I think that has been no secret that we think the market opportunity in India is really outstanding,” Wal-Mart spokeswoman Beth Keck told the Associated Press on Feb. 2.

You don’t say. However, the government is playing hard-to-get:

The Indian government opened the doors of its retail market to 51% foreign direct investment (FDI) two weeks ago. But this most recent economic liberalization applies strictly to companies that sell goods through single-branded stores. The partial allowance permits a direct majority ownership interest by foreign entities, which, we think, is good news for many of the world’s marketers of top labels.

In S&P’s view, the widely anticipated FDI policy for limited retail investment, however, effectively slams the “Closed” sign on big-box chains and particularly Wal-Mart, feared by India’s Communist party as potentially putting mom-and-pop stores out of business by sheer virtue of its size. The retail behemoth rang up slightly more in retail sales for the year ending January, 2005, than the entire Asian subcontinent sold to its population of more than 1 billion Â…

But Wal-Mart wonÂ’t be easily dissuaded. Just ask the Mexicans:

Wal-Mart’s experience in emerging markets is the crux of its battle plan. Bentonville has been down this path of limited investment in retail before. Not too long ago, it battled anti-FDI sentiment in Mexico. In S&P’s view, Wal-Mart won that battle. It is now the biggest private employer in Mexico and operates more than 780 stores in that country.

On the positive side, all the eccentric uncles with the ear hair and the roving eye can soon get jobs as People Greeters. I can see it already. “Velcome to Val-Mart,” with a waggle and a smile… Continue reading →

A surging Indian business sector is shattering longstanding industry norms. In pharma, two Indian companies are in the bidding for a large German pharmaceutical (thanks, Sindhya):

The country’s largest pharmaceutical company, Ranbaxy Laboratories Ltd, is believed to have put in a bid of €500 million (approximately Rs 2,800 crore) for Germany’s fourth largest generic company, Betapharm… This is €50 million more than the bid of €450 million made by Dr Reddy’s Laboratories…

Industry analysts said it was for the first time that two Indian companies had emerged front-runners for a high-value overseas pharmaceutical company. If the deal materialises, it would be the largest ever overseas acquisition by an Indian company in the pharmaceutical space. [Link]

In Bombay, a matrimonial site is rumored to have been funded by one of Silicon Valley’s toniest VCs, Kleiner Perkins (via Om):

InfoEdge, which owns which owns some of India’s hottest Internet properties including the largest job portal Naukri.com… and matrimonial site Jeevan Sathi has got funding from KPCB and Ram Shriram of Sherpalo Ventures. InfoEdge did $10 million last year with profits of $1.8M. [Link]

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A post on Secular-Right India points us at a fantastic WSJ OpEd tracing the origins and rise of Lakshmi Mittal’s steel empire. Predictably, the WSJ loves Mr. Mittal –

A takeover of Arcelor would take Mr. Mittal a long way toward realizing his vision of a dominant global steelmaker in an industry for decades characterized, and brought low, by fragmentation. To pull it off, Mr. Mittal needs to break an Old World taboo against takeovers, hostile or otherwise, involving a company dear to Continental protectionists’ heart. That this task falls to a man born in Rajasthan, and raised in Calcutta, is one of the more delicious gifts of globalization.

Alas, the sentiment isn’t quite universal. Despite swashbuckling his way through the developing world and transforming almost overnight one of the oldest, stodgiest industries in the world, 3rd Way advocates appear tougher to tame. They hit back with words which will strike some SM’ers as rather racially-tinged –

Valery Giscard d’Estaing, the former French president, warned against giving into economic “laws of the jungle.” A former French finance minister referred to Mr. Mittal as “an Indian predator,” although his company is traded and based in Europe and he hasn’t lived in India for 30 years. Mr. Dollé, the Arcelor boss, said Rotterdam-based Mittal Steel is a “company full of Indians” that wants to buy his with “monnaie de singe.” The expression means “monopoly money”–Mittal’s offer is mostly shares–but the literal translation is “monkey money.” That double-entendre wasn’t lost on people.

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What is it with desis and competitive eating? Lakshmi Mittal, the world’s third-richest man, launched a surprise bid today for his nearest steel industry rival:

While Bill Gates and Warren Buffett–numbers one and two on last year’s Forbes Billionaires list– engage in a genteel game of bridge, Lakshmi Mittal is ripping apart the world’s steel industry and reshaping it to his liking. This morning, his Mittal Steel… launched an audacious bid for Arcelor… Mittal Steel, the world’s first-largest steel maker, is seeking to pay 18.6 billion pounds ($22.7 billion) to buy the world’s second-largest producer. [Link]

By buying Arcelor, billionaire owner Lakshmi Mittal would control about 10 per cent of the global steel industry, more than three times as much as his closest rival. The purchase would be the biggest ever in the industry… creating a company with 320,000 employees and annual sales of more than $69 billion. Arcelor supplies steel to every second car in Europe… [Link]

… if successful, [the deal] would bring together the world’s number one and number two steelmakers and create the first producer capable of generating more than 100 tonnes of steel a day. [Link]

Mittal, who lives in London, floats Mittal Steel in the Netherlands and maintains Indian citizenship, has lost a couple of recent deals:

Mittal lost a relatively minor deal for a Czech steel mill to a Russian group, despite having the higher bid. And a foray outside steel into the world of oil ended in frustration when Mittal Steel’s joint bid with Indian oil company ONGC for PetroKazakhstan was topped by China National Petroleum Corp. [Link]

But his drive sounds very Roarkian:

He looked at a streak of rust on the stone and thought of iron ore under the ground. To be melted and to emerge as girders against the sky. [Link]

Azim Premji and the Ambanis clock in at numbers 38 and 60 on the Forbes list.

Related posts: World’s biggest steel company will be desi-owned, Bill Gates, Warren Buffett and…, Forbes names India’s richest, Midnight’s oil

(Comments are off: every single comment last time was someone trying to hit Mittal up for a job or cash, or someone else flaming said lamers.)

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