Tata Steel poised for £5-billion Corus offer: BBC

07 October 2006

Tata Steel is close to launching a £5-billion ($9.3-billion) takeover bid for Anglo-Dutch steel firm Corus, says BBC. If successful it would be the largest Indian takeover of a foreign company and create the world's fifth-largest steel firm, the broadcaster said.

Last week, Tata Steel, had said that it was it was looking at potential takeovers "including Corus". Tata Steel started ring fencing its share holding after Mittal Steel bought rival Arcelor for $34 billion, creating the world's biggest steel maker, earlier this year.

At the time it was being speculated that if Mittal wanted a running steel acquisition in India, Tata Steel would have been an automatic choice, given the Indian company's manufacturing efficiencies. In an attempt at globalisation, Tata Steel recently acquired NatSteel, Asia (2 mtpa) and Millennium Steel (1.7 mtpa).

Tata Steel's negotiations to acquire Corus, was first reported by UK-based newspaper The Independent last week and Sunday Telegraph reported yesterday that the Tatas had lined up financing for £3.5 billion ($6.5 billion or Rs30,471 of the approximately Rs42,928 crore deal).

Corus was created after British Steel merged with Dutch firm Koninklijke Hoogovens in 1999. The company had reported profits of $0.8 billion on revenues of $18.4 billion (Rs84,934) for the financial year 2005 and was ranked 352 in the Fortune Global 500 list of largest companies for 2006.

Corus produced 19 million tonnes of steel, or 10 per cent of total European output, and 0.6 million tonnes of aluminium during calendar year 2005 and is the second largest steel manufacturer in Europe, accounting for around 11 per cent of the carbon steels market in Europe. The company supplies metal products to a wide range of industries like construction, automotive, packaging, aerospace, energy and engineering.