European Union has approved the proposed takeover of Corus
Group by Tata Steel. The proposed deal was cleared after
the EU anti-trust office said it would not impede effective
competition in Europe. The deal was earlier approved by
the US anti-trust authorities and, with the EU approval,
has now cleared all regulatory hurdles.
approvals are required in major markets for all mergers
and acquisitions to ensure that the combined entity would
not have a negative impact on competition and hence would
be harmful for consumer interests.
company CSN, which has made a higher bid than Tata Steel
for Corus, is yet to receive anti-trust approvals. CSN
announced its bid much later than Tata Steel and is understood
to have filed for regulatory approval.
observers do not anticipate any problem for CSN getting
such approvals, though surprises cannot be ruled out completely.
Like Tata Steel, CSN does not have any major operations
in either the US or Europe. CSN had recently withdrawn
its bid to acquire a US steel maker, but has a medium-sized
galvanised products plant in Portugal.
CSN''s last offer for Corus at 515 pence per share, Tata
Steel has not made any announcements. Corus has recommended
both offers to its shareholders and has indefinitely extended
a proposed shareholders'' meeting to consider the bids.
the UK takeover panel has set 30 January, 2007, as the
deadline for revising the bids. After the deadline, the
winner would be decided by a one-time final bid auction
or an open auction, which may last for several days.
is also speculation that some of the bankers and advisors
are pushing for a three-way merger between Tata Steel,
CSN and Corus. Such an entity would have access to large
raw material sources in both India and Brazil with access
to major markets in Europe.
However, though such a merger has a lot of industrial
logic, most analysts are sceptical because neither of
Tata Steel and CSN would be readily willing to play second
fiddle in the merged entity.