The Tata Group leads India Inc''s great acquisitions sweepstakes

Sajeev Nair
16 February 2005

The Tata Group emerged as the acknowledged leader in acquisitions overseas in 2004.

Powered by the urge to go global, solid market fundamentals and the drive to create cost-competitive products, corporate India went on an acquisition spree in 2004. Acquisitions were not limited to the domestic market, but also spread overseas.

The buyout brigade was led by the Tata group, which made two major acquisitions abroad — group company Videsh Sanchar Nigam Ltd (VSNL) snapped up Tyco Global Network, while Tata Steel acquired Singapore-based NatSteel. Other group companies like Tata Tea were also active with their own takeovers.

Tata Steel's (Tisco) acquisition of the Singapore-based NatSteel for a hefty Rs1,313 crore in August 2004, topped the charts for the group during the year. It also included the Singapore government-owned company's 26 per cent stake in Malaysia-based Southern Steel Berhad, a 1.3-million tonne steel manufacturer. Announcing the buyout from Singapore through videoconferencing, Tisco MD B Muthuraman said it would help the company extend its steel-making footprint to seven Asian countries, including Vietnam, Singapore and Thailand, besides securing easier access to the buzzing Asian markets.

Muthuraman said that NatSteel, which owns mills in China, Thailand, Vietnam, the Philippines and Australia, with combined sales of Rs3,800 crore in 2003, would spin off its steel business into a wholly-owned subsidiary, NatSteel Asia Pte Ltd (NatSteel Asia), which would be subsequently acquired by Tata Steel . Both Tata Steel and NatSteel shareholders have since cleared the mega-deal. During the year, Tata Steel also acquired a small steel wire-manufacturing unit in Sri Lanka, details of which were not provided.