Thread: Corus accepts $8B offer from India's Tata Steel

Seems like you havent heard the whole press conference.. ok I will note you the points down.
TATA is much larger than CORUS not TISCO.Tatas Steel dept is smaller than Corus.
The salient FEATURES TOLD BY MD OF TATA AND HEAD CEO RATAN TATA.

dont know but what i know is
1> tata was 56th now will be 5th :P and within 2012 second/third.
2> total deal will go up by 10.26 billion dollars.
3> constructing a port in Orissa with japanese help to connect with Port alberto.
4> to increase jamshedpurs capacity by 10 million toonnnes by 2010.
5> the greenfield projects that they r doing in india , acquiring 800 acress or so land in three places or more and producing factories wont get hindered cuz of this.
thats what Tatas Md told in the Press sonference directly from London with Corus management board CEO present.
remember one thing this deal isnt through final its upto the shareholders to decide whether 455 pence per share is enuff or not but tata has offerred a 26% premium to the shareholders over its previous value.
this is not whole tata only its steel department :P TCS is another story.

now someone a guy in PDF said this deal means UK dumping india with global warming he was so wrong.. becuz
its TATA buying CORUS not CORUS buying TATA.so thers no question of job cuts as TATA assured Corus and tata will do business get in africa get the technology and the whole R&D department of corus

THIS IS A VERY GOOD DEAL check this thread http://pakistanidefenceforum.com/ind...0&#entry813689
not TATA but TISCO might be in debt but this wont be problem their turnover WILL BE HUGE.

a guy from BR posted

It is a misconception that Tata is buying a company that is bigger than itself. Tata Sons, the holding company for all/most of the Tata businesses has market capitalization of $44Billion and they are buying Corus whose market capitalization is puny $8B.

Tata's can buy Corus in cash just by selling 30 to 40% of TCS holdings. No biggi here for Tata's.

All/most debt will be raised abroad, most prolly in London itself and Corus's assets and future cash flow (not Tata steel’s) will be collateral for those loans. Later those loans will be refinanced by bonds, fresh equity and internal cash flows to bring down the interest cost.

and TATA is not seling TCS shares either , paying through UK subsidiary , standard chattered bank is paying 400million dollars or so ..
so dont worry.
this is a HUGE HUGE DEAL AND A SIGN OF GROWING INDIAN ECONOMY.

check this too http://forums.bharat-rakshak.com/vie...=2226&start=80

Jindals set to acquire Thai steel major

MUMBAI: Call it the great Indian shopping festival, if you will. But the number of Indian companies announcing acquisitions abroad over the last couple of weeks has created a stir globally. The latest to join the shopping binge is Jindal Steel. It is close to buying out ThaiNox, Thailand’s largest stainless steel company, for $325 million.

Sources close to the company say it is part of Jindal’s strategy to consolidate its presence in the southeast Asian market. If the deal goes through, this will be Jindal’s second acquisition in the region after it acquired Indonesia’s Maspion Steel in 2004.

When contacted, a spokesperson for Jindal said, "We keep looking at opportunities to expand our business and routinely evaluate them. Right now, we have not firmed up our plans."

Tata is now world's 5th largest steel producer... a big jump from 50th something...

Originally Posted by Hari_Om

I am not sure if this is a good deal for Tata Steel.

It appears to me that Tata Steel is likely to have overreached in taking over Corus. Corus is significantly larger than Tata Steel.

I would much rather have seen Tata Steel plow in this USD 8 Billion into building greenfield production capacity in India.

Hari,

Rules of the games have changed dramatically since India opened up. Now Its nearly impossible to depend only on Organic growth for expansion, inorganic growth through acquisitions not only give you a sudden boost, they also open up new markets. Its Scale, product mix along with cost which rule.
Corus makes high end steel, which commands premium price and it also opens uo European Market for TATA. TATA is a large producer of Slab steel, which now can be refined to premium grades in Corus. Corus gets acess to cheap Slab steel and Iron ore from TATA bringing down the cost.

What i have heard is that Quality of Corus products and its R&D it world class. Thats what attracted TATAs to it. It will benefit TATA in the long run as tech will be transfered to all of TATA mfg plants incld the TATA Motors which will gain from this as Corus makes good quality of automotive steel. At last TATA vehicles will weigh as much as competition and not more which should aid in reducing the fuel consumption gr8tly.

Tata Group is still a conservative company. They would have thought out all the ramifications with this aquisition.

Consolidation is the norm in steel industry. Real challenge for them will be to perform during global slowdown(if there is one) in commodities a few years down the road.

How times have a-changed! Not long ago, our concern was dilution of Indian manufacturing sector via M&A, ie, MNC's gobbling away our cos. Now the tables have turned.

Originally Posted by kams

Hari,

Rules of the games have changed dramatically since India opened up. Now Its nearly impossible to depend only on Organic growth for expansion, inorganic growth through acquisitions not only give you a sudden boost, they also open up new markets.

Kams,

That’s not how it appears to me in Tata Steels case.

Tata Steel has publicly announced plans to augment capacity in India by a further 28 mtpa ( 5 mtpa at Jamshedpur, 12 mtpa at Manoharpur/Chandil, 5 mtpa at Bastar and 6 mtpa at Durburi). That’s a plateful that would satisfy the most committed gourmand.

TATA is a large producer of Slab steel, which now can be refined to premium grades in Corus. Corus gets acess to cheap Slab steel and Iron ore from TATA bringing down the cost.

That presumes two things.

Tata Steel has slab capacity to feed the many orders of magnitude higher appetite of Corus without starving its own downstream infrastructure and that the slab capacity of Corus can be axed. IMO, difficult propositions.

This is one poisoned chalice that Tata Steel should have stayed away from.

I am hoping that a counter bid that will have the pension trustees support appears and Tata Steel walks away with the break fee jingling in its pockets.

The Tata Group on the march again. Not in the steel business but this time in the submarine cable business.

2.56 tbps maximum capacity is a respectable figure.

The Tata Group already wholly owns 10.24 tbps maximum capacity via Tata Indicom (5.12 tbps) and Tyco Global (5.12 tbps) whom they acquired. That leaves out the maximum capacity of Teleglobe, of which I am clueless, whom the Tata Group also brought out

This deal will cement the Tata Group’s position as a major player in the submarine cable business :

VSNL to lead India-Europe submarine link project

Excellent !!

The Tata group should take this opportunity to walk away from this deal and pocket the break fee :

CSN Offers $8 Billion for Corus, Countering Tata Bid