Tata to buy Corus
India-based Tata Steel has made an offer to buy Corus Group, an Anglo-Dutch steel company. The buyout is set at $8 billion. Corus is Europe’s #2 steelmaker (after Mittal) and the #8 in the world.
Tata is #52 in steel, but it is a part of the very large Indian conglomerate Tata Group. The steel operation would become #5 after the deal. If the deal goes through, it will be the largest acquisition ever by an Indian company. Tata acquired Singapore's NatSteel in 2005 for $850 million.
Tata Steel, founded in 1907, is considered to be the lowest-cost steel producer in the world. By contrast, Corus considered one of the least efficient in the world. IT
Corus itself is the result of the 1999 merger of Netherlands-based Koninklijke Hoogovens NV and British Steel PLC. . The company sold some its aluminum finishing operations earlier in 2006 to US-based Aleris for $850 million.
The merger of Mittal and Arcelor, as we have noted, has other scrambling to bulk up so they can compete internationally. Among rumored suitors for Corus have been Russia’s Severstal, Everaz (also Russian), and Germany’s Thyssen Krupp. One of those companies may yet derail the buyout with an even higher bid. The deal may also be stopped by pension fund issues, even though some relief for the fund is part of Tata’s offer.
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