Arya Samaj

Mitra · Posted: Thu Feb 01, 2007 5:24 am Post subject: Global India

$12.1 billion & Corus is Tata’s

Indian Express

AUCTION: Outbidding Brazil’s CSN, Ratan Tata says: ‘Will prove to be visionary’

In the biggest acquisition overseas by an Indian company, the Tatas today overwhelmed Brazilian rival Companhia Siderurgica Nacional (CSN) to take over Anglo-Dutch steel firm Corus with a $12.1 billion bid, becoming the world`s fifth-largest steelmaker.

‘‘It is a moment of fulfilment for India... this will prove to be a visionary move,’’ Tata Group Chairman Ratan Tata told reporters in Mumbai after announcing victory.

‘‘I have not slept a wink. The entire night I was here (at the Taj hotel in Mumbai) to oversee the auction,’’ he told The Indian Express.

From a room in the hotel, Ratan Tata and Tata Sons Director N Soonawala, Tata Steel Managing Director B Muthuraman and Tata Steel Vice-President (Finance) Kaushik Chatterjee used a video link to coordinate the bids with Tata Sons Director Arun Gandhi in London.

The big deal, fine print

• The final cash offer of Tata Steel is 608 pence for each Corus share, 34% higher than its first offer in October and 5 pence more than the final offer from CSN.

• Tata offer values Corus at around nine times its earnings before interest, tax, depreciation and amortisation in the year to September 2006.

• Tata Steel will contribute $4.1 billion to the deal, with the balance to be raised through debt.

• The deal will treble Tata Steel’s capacity to almost 28 million tonnes a year from 8.7 million now at half the cost of building new plants.

• Ratan Tata will be chairman of the new board of Corus to be formed after the takeover.

• Tata Steel will not change any principal locations of Corus group’s business, and will continue to be headquartered in India. (Reuters)

(Source)

Prabhat · Posted: Thu Feb 01, 2007 11:04 pm Post subject:

ehuh,

Tata paid today 8.9 billion euro to Corus. Why that much????
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Namaste,
Prabhat

Mitra · Posted: Sat Feb 03, 2007 3:14 am Post subject:

Tata actuslly is going to pay$ 12 bn . It started at 8bn but they bid up to 12 bn.
The Tatas will be able to use the 19mn tonnes of steel produced by Corus plants. If they had to build new factories to start making all that steel it would cost a lot more. Buying corus is cheaper and easier than building new factories. Plus, tatas also get entry into new markets outside Asia , because Corus already has its distributors.
So Tatas went for growth.
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Namaste
Manurbhava