Reversal of fortunes

Tata Chairman Ratan Tata
Wed 31 Jan 2007

Indian steel giant wins battle for Corus
THE battle for steel firm Corus has been won by Indian company Tata Steel.

Tata, one of India's oldest companies, has bought out the Anglo-Dutch firm in a deal worth £6.7 billion following a bitter bidding war with Brazilian rival CSN.

The deal will create the world's fifth largest steel group, capable of producing about 24 million tonnes of steel a year.

Mumbai-based Tata offered 608 pence a share for Corus, valuing the company at around £5.57bn, although a spokesman for Tata said the total deal was worth £6.7bn.

The two-way battle for what was once British Steel began in October when Tata tabled a £4.1bn bid. In December, the Corus board recommended Tata's revised £4.7bn offer. But, just hours later the board confirmed it had approved a 515p a share, or £4.9bn, offer from CSN.

Both firms have had their takeover offers approved by the European Commission on the grounds that a tie-up between Corus and either company would not hamper competition in the European Economic Area.

JJ Irani, a director on the board of Tata Steel, said the acquisition of Corus will help improve Tata's negotiating power in the global steel market. He added: "From a small player, we will now become a big player."

Corus employs 47,300 people worldwide, including 24,000 in the UK at plants at Port Talbot, Scunthorpe and Rotherham.



Profile of Tata Steel
Established in 1907, Tata Steel is Asia's first and India's largest private sector steel company. Tata Steel is among the lowest cost producers of steel in the world and one of the few select steel companies in the world that is EVA+ (Economic Value Added).

Its captive raw material resources and the state-of-the-art 5 MTPA (million tonne per annum) plant at Jamshedpur, in Jharkhand State, India give it a competitive edge. Determined to be a major global steel player, Tata Steel has recently included in its fold NatSteel, Asia (2 MTPA) and Millennium Steel (1.7 MTPA) creating a manufacturing network in eight markets in South East Asia and Pacific rim countries. Soon the Jamshedpur plant will expand its capacity from 5 MTPA to 7 MTPA by 2008. The Company plans to enhance its capacity, manifold through organic growth and investments. The Company's wire manufacturing unit in Sri Lanka is known as Lanka Special Steel, while the joint venture in Thailand for limestone mining is known as Sila Eastern.

Tata Steel's products are targeted at the quality conscious auto sector and the burgeoning construction industry. With wire manufacturing facilities in India, Sri Lanka and Thailand, the Company plans to emerge as a major global player in the wire business.

My Note: I guess it is true. The sun has set on the British Empire. While there have been many signs, the purchase of Corus (formerly British Steel), must be the final nail. The West has long pushed for India to open up and success has now resulted in some interesting developments. It also signifies the rise of the indutrial power of countries long cast as primitive. India and Brazil (the sleeping giant) and leading the way for other democratic countires (China is not a democracy). There are others including South Africa, Nigeria, Ghana, Kenya, Indonesia, Malaysia, Thailand, Venezuala, Argentina and Mexico that have the potential to follow. I am hopeful that the visionary leadership necessary for true development will continue to develop.