Corus in kitty, Ratan Tata to be chairman
Severstal is likely to make a counter-offer after Tata Steel's bid to take over Corus was okayed.
By INDIATIMES NEWS NETWORK |
No sooner that the Mittal-Arcelor takeover bid was successfully sealed that another Indian company Tata Steel's bid to takeover an Anglo-Dutch steel-maker Corus has been okayed at $7.7 billion. It makes it the largest Indian takeover of a foreign company and the acquisition will create the world's fifth-largest steel group.
The final details are now being agreed upon and a formal announcement is expected later, when Ratan Tata addresses a press conference in London Friday evening.
Corus acquisition is to be made via the U.K subsidiary, and all board members of Corus management will stay.
B Muthuraman, MD of Tata Steel disclosed that Ratan Tata will be the chairman of both the companies. He said, "both the companies have similar work cultures and that they are looking at smoothest integration in a short span.
Tata Steel will use debt of 6 billion to finance the deal and Standard Chartered Bank will provide the debt-finance.
It is learnt that Severstal is again likely to make a counter-offer.
The deal is the largest Indian takeover of a foreign company and will create the world's fifth-largest steel group.
Corus was formed in 1999 following the merger of British Steel and Dutch group Hoogovens. It employs 47,300 worldwide and 24,000 in the UK.
In 2005, Tata Steel was only the world's 56th biggest steel producer and its takeover of Corus represents its first expansion outside Asia.
The Corus shares have risen in recent months on speculation the Anglo-Dutch group could face a takeover following the recent creation of Arcelor Mittal.
Tata Steel produced more than five million tonnes in the year ending March 2006 and aims to reach 7.5 million tonnes by 2008. It has 3.8 billion dollars in annual turnover while Corus has 18 billion dollars.
Analysts feel that this deal is unlikely to have an impact on domestic steel industry.
The final details are now being agreed upon and a formal announcement is expected later, when Ratan Tata addresses a press conference in London Friday evening.
Corus acquisition is to be made via the U.K subsidiary, and all board members of Corus management will stay.
B Muthuraman, MD of Tata Steel disclosed that Ratan Tata will be the chairman of both the companies. He said, "both the companies have similar work cultures and that they are looking at smoothest integration in a short span.
Tata Steel will use debt of 6 billion to finance the deal and Standard Chartered Bank will provide the debt-finance.
It is learnt that Severstal is again likely to make a counter-offer.
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The deal is the largest Indian takeover of a foreign company and will create the world's fifth-largest steel group.
Corus was formed in 1999 following the merger of British Steel and Dutch group Hoogovens. It employs 47,300 worldwide and 24,000 in the UK.
In 2005, Tata Steel was only the world's 56th biggest steel producer and its takeover of Corus represents its first expansion outside Asia.
The Corus shares have risen in recent months on speculation the Anglo-Dutch group could face a takeover following the recent creation of Arcelor Mittal.
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Tata Steel produced more than five million tonnes in the year ending March 2006 and aims to reach 7.5 million tonnes by 2008. It has 3.8 billion dollars in annual turnover while Corus has 18 billion dollars.
Analysts feel that this deal is unlikely to have an impact on domestic steel industry.
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