1. On 20 October 2006 the board of directors of Anglo-Dutch steelmaker Corus accepted a $7.

6
billion takeover bid from Tata Steel, the Indian steel company, at 455 pence per share of Corus.
2. Tata Steel's bid to acquire Corus Group was challenged by CSN, the Brazilian steel makerFinally,
on 30 January 2007; Tata Steel purchased a 100% stake in the Corus Group at 608 pence per
share in an all cash deal, cumulatively valued at USD 12.04 Billion.
In November 2006, Brazilian steel maker Companhia Siderrgica Nacional (CSN) challenged Tata Steel's
proposal for acquisition. They countered Tata Steel's offer of 455 pence per share by offering 475 pence
per share of Corus. There was lot of bull fight between the 2 group between this period before in Jan,
2007 TATA steel won their bid for Corus after offering 608pence per share valuing corus at $11.3bn
Corus:
1. Corus, is an Anglo Dutch steel makers and was formed from the merger of Koninklijke
Hoogovens N.V. with British Steel Plc on 6 October 1999.
2. It has major integrated steel plants at Port Talbot, South Wales; Scunthorpe, North Lincolnshire;
Teesside, Cleveland (all in the United Kingdom) and IJmuiden in the Netherlands.

Reasoning Behind:
1. Tata had a strong retail and distribution network in India and SE Asia. This would give the
European manufacturer an in-road into the emerging Asian markets. Tata was a major supplier
to the Indian auto industry and the demand for value added steel products was growing in this
market. Hence there would be a powerful combination of high quality developed and low cost
high growth markets

A Corus of acclaim
Over a year in preparation and a sleepless night of bidding for Corus:
Thats what took Tata Steel from the fifty-sixth to the sixth-largest
steelmaker in the world. Whats in store for the new steel giant?

As the sun rose on the last day of January, India woke up to the news that Tata Steel had
acquired British steelmaker Corus at 608 pence a share, in one of the most remarkable
takeovers of the times, to move from the worlds 56th largest steelmaker to the sixth-largest.
A breathless and ecstatic Indian media hailed the takeover as a historic and momentous
event not just for the Tata group but for a resurgent India Inc. The 6.7 billion Corus
takeover is almost 10 times larger than any previous acquisition made by the group or by
any Indian company. Says Philippe Varin, chief executive officer, Corus: You dont do this
kind of thing twice in a lifetime.
How does he feel about Tata being the winner? I am very pleased to be in a situation
where our shareholders are satisfied and the employees have a strategic future. He should
be. Prior to Varin joining Corus in 2003, the company was close to disaster: Corus shares
were trading at a dismal 20 pence, and the former British Steel urgently needed
restructuring. Radical measures followed, which revived the companys fortunes
considerably.
In a 2005 strategic review, the board had already agreed that the next stage would have to
be a strategic alliance or takeover. Tata Steel had just the right mix being the worlds
most profitable steel company and located in Asias fast growing markets with access to raw
material.
What does he feel about the other contender for Corus, Brazils CSN? Our first contact with
Tata was in 2005, so we had been discussing for one year, he says, adding, but, in all
fairness, CSN was also a good business case for the company and we had to recognise
that as well, though our contact with them was much shorter. What about the talk of the
price being too high? Of course the deal is very pricey, but I can tell you we will make it
work and I am completely dedicated to this, Varin states confidently.
He is clear about the way ahead. If in the UK, you can supply a commodity product at 100
per cent delivery on-time, then it is difficult for the others to compete. So either in terms of
the value-added to the products or the service, we must add some barriers. The only other
way to do it is to have access to low cost slabs, in this case from India. But since it will
probably take a while before Tata Steel can supply raw steel to the Corus plants, Corus
already has a short-to medium-term strategy in place.
The company has already kicked off a capex programme of 150 million to develop higher
value-added products, like stronger steel for thinner car bodies, and rails that are 120m long
instead of 40m where its lower-cost competitors cannot compete. Other programmes
include improving on-time delivery to customers, upgrading the quality of the mix and

improving the efficiency of blast furnaces. With 900 people in R&D, Corus is a technological
powerhouse, and the R&D people are looking forward to transfer some of their skills to the
growing markets of Asia.
Corus has just over 41,000 employees, Tata Steel has another 42,000; and between
Natsteel in Singapore and Millenium Steel in Thailand, there are another 5,000. What kind
of business and growth opportunities are in store for such a gigantic employee base? Says
Varin, I think we are going to have a global company with an international management,
and this is a very positive characteristic for a strong future. There will be a lot of potential
synergies in terms of sharing of best practices across the companies. For the employees,
there will be new experiences, new markets that they will be exposed to and opportunities
for development.
Still, some amount of apprehension remains about their future, especially in
British plants. Varin feels it has little to do with the merger. The companys strategic future
is very good, but obviously there are some concerns, especially in some UK plants. I dont
think it is linked to Tata, because at the end of the day the future of any plant depends on its
competitiveness. Corus has very strong assets too; it has more than a 50 per cent market
share in the UK and is well positioned in Europe, especially in the high value automotive,
packaging and construction markets.
One big concern analysts feel is that the economics of the deal are based on a projection
that the world steel market will continue its present secular uptrend for the next four to five
years. Could we be exposed in the short term (2 to 3 years) to a big dip in the market? Varin
is unfazed: I dont have a crystal ball, he says candidly, but I think the structural trends in
demand in China and India are no bubble. The question is on the supply side. China has
been worrying because it has uncontrolled production. But the government of China has
understood this, and the only question is its ability to make things happen. If at all there is a
cycle, he says, it would probably be of lower amplitude and more manageable, even
assuming that China is not fully controlling its exports.
Now that the excitement of the acquisition is over, its time for the hard work to start
integration. There are people who will tell you that you must have a detailed list of
synergies, hundreds of teams working to integrate processes, spreadsheets, etc. This is
great for consultants but, at the end of the day, two-thirds of the mergers which begin this
way fail, says Varin firmly. He favours a team at the top that drives the merger and shows
the way. The first task that B Muthuraman (MD, Tata Steel) and I have is to ensure that the
top management on both sides fits the requirements. The second is that the corporate

strategy should be very clear, he says. Third is that there are obvious synergies and we
need to identify areas where we can do things together quickly.
But this requires careful choices nobody can do everything at the same time. So, say we
choose 10 areas. We first get results on these 10 areas then go to the following 10, rather
than doing too many things in parallel and not going anywhere, he points out. Tatas
concept is clear to develop the Indian manufacturing hub and satellite finishing facilities
in South East Asia. Corus has been implementing a turnaround strategy and focusing on
the automotive, packaging and construction markets in Europe. Very quickly, we have to
see what are the good things on both sides and what is the genetic code of the new
company, says Varin.
And the future? We would not forever stay at Number 5, laughs Varin, pointing out that
while there are some questions of debt and proper firepower, the characteristic of the new
company will be defined on its very strong internal cohesiveness, its values and its technical
excellence. We have started at Number 5, but we will go up, he says confidently.
Speaking about the future is not easy for a man who could have resigned if CSN won the
bid for the steel giant. The dice seem to be rolling his way

Tata Steel to produce half of Corus' raw

materials by 2012
http://www.thehindubusinessline.com/companies/tata-steel-minerals-canada-may-invest-in-iron-ore-project-in-northamerica/article5610226.ece
August 03, 2009 09:36 IST

Tata Steel, the world's sixth largest steelmaker, has prepared a plan to produce half the iron ore
and coking coal - the raw materials used to make steel - for Corus, its European subsidiary, by
2012.
The move will help downturn-hit Corus, which Tata Steel acquired for $12 billion in 2007, to cut
input costs and operate on higher profit margins like its Indian parent.
"The raw materials would come from our mines in Mozambique, Canada, South Africa and Cote
d'Ivoire," said Tata Steel's managing director, B Muthuraman.
"The mine in South Africa will start production by end of 2010, while the mines in Mozambique
and Canada will be operational by 2011. From Cote d'Ivoire (also called Ivory Coast), we require
five to eight years for production to begin," Muthuraman recently said.

Industry analysts estimated that Corus could save up to 60 per cent of input costs, translating
into a cost reduction of about $120 a tonne of steel, if it could achieve full self-sufficiency in raw
materials.
"Since the company is looking for only 50 per cent raw material security, the overall input cost
reduction will be 30 per cent, or $60 a tonne of steel," said Prasad Baji, senior vice-president,
Edelweiss.
Corus, which has an annual production capacity of 20 million tonnes, has its major plants
located in the UK, the Netherlands, Germany, France and Belgium. Current capacity utilisation
at these plants, however, is only 53 per cent.
It will be increased to 65 per cent by the September quarter and then to 75 per cent in the
December quarter, said Muthuraman. Full self-sufficiency would help the European steelmaker
save about $2.4 billion annually when it runs in full capacity.
The Tata Steel group, including Indian and European operations, had spent over $8 billion
(about Rs 40,000 crore) on raw material purchase in the previous fiscal year. The current
landing price of iron ore from the contract market, at $80-90 a tonne, is three times that of the
ore from captive mines. The cost will be halved in coking coal.
For the Indian operation, Tata Steel sources its entire iron ore and 65 per cent of coking coal
from its captive mines.
Corus, which has been hit by the global financial crisis and the collapse of steel prices, has cut
manpower and is in the process of selling assets to weather the downturn. In OctoberNovember, the firm launched two restructuring programmes.
The first of these - labelled 'Weathering the Storm' - yielded $1.02 billion in the second half of
the past financial year. The second initiative - 'Fit For Future' - has led to annual enhancement
of $286 million in Ebitda (earnings before interest, taxes, depreciation and amortisation).
In April, Tata Steel had secured an equity interest in an iron ore deposit in South Africa from
which it expects to mine two million tonnes a year. The Sedibang mine has a reserve of about 50
mt. The company also expects to mine four mt of iron ore in Canada and five to six mt of coal in
Mozambique.
In 2007, Tata Steel bought 35 per cent in two coal tenements of Riversdale Mining in
Mozambique. It also signed a $100 million offtake agreement with the Australian miner that
gives the Tatas the right to buy 40 per cent of coal produced from the two fields. The steelmaker
also bought a 19.38 per cent stake in Riversdale in four open market share purchases.

Tata Steel Minerals Canada may invest in iron ore project in North America
www.thehindubusinessline.com/.../tata-steel-minerals-canada...iron-ore-p...

Kolkata, January 23:

TATA steel Minerals Canada (TSMC), 80% owned by Tata Steel is likely to take a major
investment decision sortly for the low grade iron ore (tactonite) mining project in the semi Arctic
region of North America. As reported on 23 Jan14 TSMC was expected to soon review the
feasibility study on the two deposits and the projects financial model.
An initial estimate suggested investments worth $4.4 billion and $5 billion each were required
for development of two deposits LabMag and KeMag apart from cost of a 600-km long
ferroduct to carry ore slurry and deep port terminal handling facilities is additional to mine
development costs. The infrastructure portion of the project could be funded by specialised
long-term financing at competitive interest rates.
Tata Steel Minerals Canada (TSMC), 80 per cent owned by Tata Steel, is likely to take a major
investment decision shortly for the low-grade iron ore (taconite) mining project in the semiArctic region of North America.
New Millennium Iron Corp (NML), Tata Steels junior strategic partner in TSMC, said TSMC
was expected to review soon the feasibility study on the two deposits and the projects financial
model to determine the future of the ambitious project.
The deposits -- LabMag and KeMag -- having around 30 per cent iron content are part of the
150-km long Millennium Iron Range in northern Canada. An initial estimate suggested
investments worth $4.4 billion and $5 billion each were required for development.
Cost of other project infrastructure a 600-km long ferroduct to carry ore slurry and deep port
terminal handling facilities is additional to mine development costs. Dean Journeaux, CEO of
Torornto-listed NML, said: We believe that the results (of the study) are positive.
He also said in a recent statement to the Toronto Stock Exchange that the infrastructure portion
of the project could be funded by specialised long-term financing at competitive interest rates.
The final report would also include such options. NML has also prepared the financial models
for the project, based on the study manager results, including after-tax projection. NML, after
consultation with Tata Steel, engaged an internationally recognised firm to review the financial
models and assumptions to give more assurance on the outcome. According to the proposed
timeline, this exercise was to be complete this month.
Meanwhile, TSMCs direct shipping ore project for magnetite ore in the nearby area within the
Millennium Range has made second shipment in November before closing for winter, NML said.

Tata Steel ships iron ore from Canada to European

plants

Kolkata, Sept. 24:

Tata Steel has shipped first consignment of iron ore fines from its Canadian resource project to
its European plants.
The consignment is from the project called the direct shipping ore (DSO) and is part of the
several iron ore projects that Tata Steel is pursuing in Canada.
Tata Steel Minerals Canada (TSMC), an 80 per cent owned outfit by Tata Steel, sent across
North Atlantic 77,000 tonnes of fines on September 14 from Sept-les an iron ore terminal on
the St. Lawrence River that links Great Lakes to North Atlantic. During this fiscal, Tata Steel
plans to ship 1 MT of processed iron ore fines or pallets.
To provide iron ore security to Corus units in the UK and the Netherlands, Tata Steel has been
pursuing the projects since the 2006 acquisition. In 2013-14, Tata Steel planned to ship one mt
and in 2014-15 its target is three mt.
Rail movement

The fines movement on rail had begun in July from TSMCs crushing and screening plant to the
terminal. TSMC had produced three lt of fines last year and it has resumed production this
summer in the sub-arctic eastern Canada, Tata Steel sources told Business Line.
Production and rail haulage from the DSO project are now well established and seaborne
shipments have now begun, a statement from TSMC said. Sources, however, said the current
port arrangement is interim. We are working on an alternative plan an access to an upcoming
port facility, a company official said.
The DSO projects underlying asset contains 64.1 mt of proven and probable reserves of a little
less than top grade iron (58.8 per cent) content.
Tata Steel also is involved in exploratory projects in Canadian Quebec and Labrador and
Newfoundland.
[email protected]
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Tata Steel to produce 1 MT iron ore from Canada

proj this year
PTI Aug 15, 2013, 02.41PM IST

NEW DELHI: Tata Steel is looking to produce 1 million tonne iron ore from its project in
Canada during the current fiscal, a move that will boost raw material supplies to its European
operations.
It is also targeting to ramp up the production from Direct Shipping Ore (DSO) Project to over 3
MT next fiscal, it said in a presentation posted on its website.
Tata Steel, through Tata Steel Minerals Canada (TSMC), holds 80% stake in the DSO project.
The production is expected to begin from the October-December quarter.
"(There is a) plan for 1 MT of iron ore in FY 2014, to be ramped up to over 3 MT in FY 2015.
Key permits, approvals and environmental clearances (have been) obtained and construction is
underway," the company said.
In July, the DSO project had despatched its first train with products containing TSMC's dry
crushing and screening plant with 164 cars of 100 tonnes capacity each to the Iron Ore Company
of Canada terminal in Sept-Iles.
Tata Steel has also made port arrangements for the current year dispatches.
The DSO Project, run by TSMC, contains 64.1 MT of proven and probable reserves having an
average grade of 58.8 per cent iron. It also has about 60 MT indicated, inferred and historical
resources of various grades of iron.
Tata Steel has the commitment to invest about 300 million Canadian dollars on the DSO project.
Some time back, New Millennium Iron Corporation - the 20 per cent partner in DSO Project had said that construction of the processing complex and ancillary facilities are expected to be
completed during the last quarter of 2013 and then, the first production will happen.
Iron ore from the project will be shipped to Tata Steel's European operations as pellets and sinter
fines. The company had already made a commitment to take 100 per cent of the DSO project's
iron ore products for the life of the mining operations.
Besides the DSO project, Tata Steel has 26.3 per cent stake in Canadian firm New Millennium
Iron Corporation and 51 per cent stake in Howse iron ore deposit of Labrador Iron Mines.
TSMC is also involved in the development of New Millennium's LabMag-KeMag iron ore
deposits, which together have proven and probable reserves of 5.6 billion tonnes of low grade
iron ore.
The DSO Project and LabMag-KeMag deposits are major crucial links for the raw material
security of Tata Steel's European operations, which does not have any captive mine of its own.
http://articles.economictimes.indiatimes.com/2013-08-15/news/41413498_1_iron-ore-cent-iron-dsoproject
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