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    Tata Corus

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    Rajesh Mahajan
    Tata Steel acquired Corus Steel in a $12 billion deal completed in 2007. Some key points: 1) Tata Steel paid 608 pence per share to acquire 100% of Corus Steel, surpassing a competing bid. 2) The acquisition made Tata Steel the world's fifth largest steel producer with a combined capacity of 23 million tonnes. 3) It provided Tata Steel access to Corus' downstream operations and distribution in the European steel market, where Tata previously did not have a presence. 4) The premium Tata paid of nearly 50% over Corus' share price highlighted Tata's strategic motivation to gain a foothold in Western markets through

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    Tata Corus

    Uploaded by

    Rajesh Mahajan
    40 views11 pages
    Tata Steel acquired Corus Steel in a $12 billion deal completed in 2007. Some key points: 1) Tata Steel paid 608 pence per share to acquire 100% of Corus Steel, surpassing a competing bid. 2) The acquisition made Tata Steel the world's fifth largest steel producer with a combined capacity of 23 million tonnes. 3) It provided Tata Steel access to Corus' downstream operations and distribution in the European steel market, where Tata previously did not have a presence. 4) The premium Tata paid of nearly 50% over Corus' share price highlighted Tata's strategic motivation to gain a foothold in Western markets through

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    Tata Steel acquired Corus Steel in a $12 billion deal completed in 2007. Some key points: 1) Tata Steel paid 608 pence per share to acquire 100% of Corus Steel, surpassing a competing bid. 2) The acquisition made Tata Steel the world's fifth largest steel producer with a combined capacity of 23 million tonnes. 3) It provided Tata Steel access to Corus' downstream operations and distribution in the European steel market, where Tata previously did not have a presence. 4) The premium Tata paid of nearly 50% over Corus' share price highlighted Tata's strategic motivation to gain a foothold in Western markets through

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    40 views11 pages

    Tata Corus

    Uploaded by

    Rajesh Mahajan
    Tata Steel acquired Corus Steel in a $12 billion deal completed in 2007. Some key points: 1) Tata Steel paid 608 pence per share to acquire 100% of Corus Steel, surpassing a competing bid. 2) The acquisition made Tata Steel the world's fifth largest steel producer with a combined capacity of 23 million tonnes. 3) It provided Tata Steel access to Corus' downstream operations and distribution in the European steel market, where Tata previously did not have a presence. 4) The premium Tata paid of nearly 50% over Corus' share price highlighted Tata's strategic motivation to gain a foothold in Western markets through

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    of 11

    Mergers & Acquisitions

    TATA Steel – CORUS

    Made by –
    Roll No: 71 - 80
     Merger : To merge means to combine together, when
    two or more organization's come together with mutual
    consent, for a specific objective it is recognized as merger
    between those organizations.

     Acquisition : To Acquire means to take the possession of


    something. An acquisition, also known as a takeover or a
    buyout is the buying of one company (the ‘target’) by
    another company, for specific motive.

    What is Mergers & Acquisitions?


    Types of Mergers :
    Types of Acquisitions :
     Profit maximization.

     Quicker way to growth.

     Taking on the global competition.

     Acquiring visibility and international brands.

     Developing new product mixes

     Accessing new markets.

    Reasons for M & A :


    Founded: INDIA in 1907

    CEO: Ratan Tata

    Headquarters: Mumbai, Maharashtra, India

    Revenue: US$32.77 billion

    Total assets: $31.16 billion

    Employees: 86,548

    TATA Steel Fact File :


    Founded: Koninklijke Hoogovens N.V. in 1918

    Headquarters: London, England, UK

    CEO: Kirby Adams

    Revenue: £10,142 million

    Net income: £451 million

    Employees: 50,000

    CORUS Steel Fact File :


     The process has started on September 20, 2006 and completed on
    July 2, 2007 at a price of 608 pence per ordinary share in cash.

     100% acquisition and the new entity will be run by one of Tata’s steel
    subsidiaries.

     The total value of this acquisition amounted to ₤6.2 billion (US$12


    billion).

     Surpassed the final bid from Brazilian Steel maker Companhia


    Siderurgica Nacional (CSN)
    CSN of 603 pence per share.

     Tata has reportedly financed only $4 billion of the Corus purchase


    from internal company resources.

     Tata Steel appointed Credit Suisse, ABN Amro and Deutsche Bank to
    arrange financing. Of the £3.3 billion of financing being raised at the
    SPV level.

     Credit Suisse provided 45%, ABN AMRO and Deutsche 27.5% each.

    Tata Corus acquisition :


     The deal is likely to confer three principal benefits on Tata Steel:
    Larger scale, strong downstream business operations, and cross-
    fertilisation of R&D capabilities.

     The acquisition of Corus propelled Tata Steel to the position of the


    world's fifth largest steel-maker with a combined capacity of about 23
    million tonnes, from its 56th position.

     Corus, which controls about 50% of the UK steel market (volume


    terms), is likely to offer Tata Steel the direct distribution gateway
    into the European markets, where the latter currently does not have
    a presence.

     The price paid by TATA represents a very high 49% premium over the
    closing mid market share price of Corus on 4 October, 2006 and a
    premium of over 68% over the average closing market share price over
    the twelve month period.

     Tata Steel’s share fell by 10.7% on the Bombay stock market.

    Post Acquisition Details :


    “In order to gain competitive edge and access in
    western and European markets producers in
    emerging low-cost markets like India has to make
    advancements by the way of Mergers & Acquisitions
    of the companies established in those markets.”

    Conclusion :
    Thank You

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