Tata emerges winner in Corus bid

Beating Brazil’s CSN in a fast-paced auction to emerge as the world’s fifth largest steelmaker, Tata Group, India today clinched a deal to buy Corus for £6.7 billion ($11.3 billion).

In a biggest ever acquisition made by an Indian company, Tata emerged victorious with a bid of 608p a share, beating a 603p a share offer made by Brazil’s Companhia Siderurgica Nacional (CSN).

Backed by multinational bankers, ABN Amro, NM Rotchschild and Deutsche Bank, Tata Steel is all ready to execute an all-cash deal.

A successful takeover of Corus transforms Tata Steel currently ranked 56th in the world in terms of output into a global player in the metal business.

The Tata-Corus venture could have an annual steel production of 25 million tons, fifth largest in the world.

Aiming at more pricing power and greater economies of scale, the Indian steel giant entered the global market after decades of thriving on government protection.

Meanwhile, the European giant, Corus, had been long searching for a business partner with assets in low-cost country after rising raw material and energy costs in the Britain and the Netherlands made profit making difficult.

J.J. Irani, Director on the board of Tata Steel aptly said, “The acquisition of Corus will help improve our negotiating power in the global steel market. From a small player we will now become a big player in the world market.”

Headquartered at London, Corus Group plc was formed after a merger of Koninklijke Hoogovens N.V. with British Steel Plc in October 1999. It is one of the world's largest producers of steel and aluminum.

Meanwhile, the Tata Group was founded in 1860s by Jamshedji Tata. It has operations in more than 40 countries across six continents and also exports products and services to 140 nations.

In all, the Tata Group comprises of 96 companies in seven business sectors namely, engineering, materials, information technology, communication, automotive, chemicals and energy.

65.8% of the ownership of Tata Group is held by the charitable trust of Tata.

Elated over the successful acquisition, Kamal Nath, India's commerce and industry minister said, “This means the global perception of India is changing."

"It is a two-way street now. Not only India is seeking foreign investment but Indian companies are emerging investors in other countries.” He added.