1.2. Read the following article and then

a) say if these statements are true or false, give reasons for your answers:

1. European companies face competition from new directions;

2. integration of European business into the global economy is becoming increasingly deeper due to the M@A process;

3. European businesses have to be international to survive;

4. to become successfully global, European companies have to combine several approaches to doing business;

5. many European businesses are doing well in the global environment thanks to their capacity for innovation.

b) make a gist of the article.

Tomorrow the world

UNTIL late last year Arcelor was Europe's largest steelmaker. It was a European champion forged from the merger of France's Usinor, Luxembourg's Arbed and Spain's Aceralia in 2001. Today it is the core of the world's largest steel company, with production of about 100m tonnes. It was taken over by Mittal, a Dutch-registered company run from London by its biggest single shareholder, Lakshmi Mittal, an Indian who started his first business in Indonesia. The takeover battle raged for six months before Arcelor's bosses finally listened to shareholders who wanted the board to accept Mittal's third offer.

The story tells us two things about European business, both positive (though they may not seem so at first sight). First, shareholder activism is increasing in a continent where until recently it was depressingly rare. (Two other recent examples come from Germany, where shareholders of Deutsche Börse forced the board to scrap a bid for the London Stock Exchange, and France, where long-suffering Eurotunnel shareholders resorted to activism to deal with the company's debt).

Second, and more important, the Arcelor-Mittal deal demonstrates Europe's deepening integration into the global economy. A series of mergers and takeovers in the 1990s—of which Arcelor itself was an example—was meant to convert national champions into wider European champions. Now these continent-wide companies are going global, either by expanding on their own or by being absorbed into new global businesses.

The Arcelor-Mittal merger was followed barely three months later by a two-way takeover struggle for another large European steel firm, Corus, between Tata Steel of India and Brazil's CSN. On January 31st Tata won with a bid of £6.7 billion to become the world's fifth-largest steel producer. Tata's first such venture, six years earlier, had been to buy Britain's Tetley Tea. As new multinational companies emerge from economies such as Brazil, Russia, India and China, such deals will become more common. Russia is already trying to align itself with European Aeronautic Defence and Space, in which its government has a shareholding. EADS, for its part, has bought into a leading Russian aerospace firm. A Dubai company has bought Britain's biggest ports, and Sabic, a petrochemicals giant from Saudi Arabia, now owns the giant ethylene crackers and plastics factories on Teesside that were once the pride of Britain's Imperial Chemical Industries, now slimmed-down ICI.

Europe has for many years played a large part in global business. A table compiled by Fortune magazine shows that half the world's 30 leading companies by revenue are European.

But in two key sectors Europe trails badly: high-tech (which mostly means IT) and life sciences. These are high-value-added industries that will weigh increasingly heavily in the world economy, so if Europe does not do well in these areas it risks falling behind.

The McKinsey analysis also shows that many European countries have a high proportion of big international companies in relation to their population. Little Switzerland, home to many global firms such as Nestlé, UBS and Credit Suisse, tops even America. At one point recently the board of Nestlé did not contain a single Swiss citizen.