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TATA-Corus deal is done!

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The last week was rife with speculations on the outcome of the TATA-Corus deal!

The deal went to the TATA’s and I am proud that I was once associated with this Indian industry behemoth!

Economic times really summarized this deal well – it was really put in a sequence and the chain of events was really enthralling!

In conjecture, the deal could’ve gone either way – the Brazilian CSN that made a counter-bid for Corus (the erstwhile British Steel) – did not have their say!

Tata Steel –

Companhia Siderurgica Nacional – CSN –

The Tata’s outbid them finally and Bombay house was witness to this!

It was not too long ago that the Britishers had denied entry to then Charman of the TATA empire – Jamshedji Tata – and he had built the Taj Mahal hotel at Gateway of India to prove their thinking wrong! It was a fitting reply that Ratan Tata worked out the deal sitting in the confines of the Taj Mahal hotel while the UK watchdog (the UK takeover panel) decided as to who gets to acquire Corus!

The Tata offer was at 608p a share – a whopping 33.6% premium (their original bid was priced at 455p a share) over their original Oct 2006 bid. Corus fell short by 5p! (The Tata’s clinced the deal with a 6.2 billion pound offer!)

It has to remembered that the Steel industry is in a state of consolidation as ratified by Aditya Mittal of the Arcelor-Mittal group – the largest steel company in the world!

Moreover, Ratan TATA’s move comes on the sidelines of speculations about who will head the TATA empire once he retires in a few years. Would it be a TATA or an outsider? It is to be seen!

Ratan TATA’s move to acquire a company (Corus) three times the size of TATA steel is a brave move – in my opinion. The kinks of the deal still are being worked out. There are synergies in this deal but it is to be seen as to how it shapes up in the years to come!

One of the British diplomats, had remarked in 1902 that he would eat all the steel that the TATA’s would produce if they produced steel according to British standards/specifications. As Economic times rightly put it, he would be better off now eating his words than all the steel that the TATA’s would produce as the TATA’s leapfrog into the world’s top 10 steel companies with this acquisition!

Below is a quote unquote:

Do you mean to say that Tatas propose to make steel rails to British specifications? Why, I will undertake to eat every pound of steel rail they succeed in making.

Sir Frederick Upcott, Chief Commissioner of Indian Railways in 1902.

CNN-IBN’s coverage of the TATA-Corus deal


Written by Naveen Athresh

February 3, 2007 at 12:23 pm

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