CSN unfazed: To look for suitors abroad
A lost-battle for Corus would force CSN to scout for acquisition targets in Russia, Japan and other mkts.
By Rajesh Unnikrishnan, TNN |
LONDON: A lost-battle for Corus Group Plc would force Brazilian steel maker CSN to scout for acquisition targets in Russia, Japan, North and Latin America and Eastern European markets where the steel industry is passing through a consolidation phase.
Steel sector analysts feel that though there small sized steel mills with a capacity of 2 to 4 million available in the European market for acquisition, no large size acquisition targets like Corus may not available immediately.
Steel sector analysts feel that though there small sized steel mills with a capacity of 2 to 4 million available in the European market for acquisition, no large size acquisition targets like Corus may not available immediately.
| "If CSN wants to well establish its position in the world steel market, it has to scout for acquisition targets in the Russia, Japan and North and Latin American markets. The steel industry in these countries is passing through a consolidation phase," an analyst said. |
Tata Steel has outbid Brazilian rival CSN to take over European steelmaker Corus offering $11.3 billion for the biggest-ever acquisition by an Indian company.
"If CSN wants to well establish its position in the world steel market, it has to scout for acquisition targets in the Russia, Japan and North and Latin American markets. The steel industry in these countries is passing through a consolidation phase," an analyst said.
Take over rumours have been floating around in the Japan steel market lifting the stock prices of steel firm in the country higher. Analyst believe Japan steel firm like Kobe Steel Sumitomo Metal Industries and Nippon Steel are in the process of consolidation through M&A. Eastern European companies like Novolipetsk Steel, Evrazholding, and Kazakhmys PLC are exploring survival strategies.
M&A activity in the steel sector is likely to continue, and that China will be a significant source of M&As over the next few years as it continues to produce and consume steel at a record pace, PricewaterhouseCoopers, in its reports on world metal industry said.
"The emerging markets were most instrumental in deal-making and we expect that Eastern Europe, Asia Pacific and Latin America will continue to be driving forces in the industry's consolidation efforts," the PWC report said.
"If CSN wants to well establish its position in the world steel market, it has to scout for acquisition targets in the Russia, Japan and North and Latin American markets. The steel industry in these countries is passing through a consolidation phase," an analyst said.
Take over rumours have been floating around in the Japan steel market lifting the stock prices of steel firm in the country higher. Analyst believe Japan steel firm like Kobe Steel Sumitomo Metal Industries and Nippon Steel are in the process of consolidation through M&A. Eastern European companies like Novolipetsk Steel, Evrazholding, and Kazakhmys PLC are exploring survival strategies.
M&A activity in the steel sector is likely to continue, and that China will be a significant source of M&As over the next few years as it continues to produce and consume steel at a record pace, PricewaterhouseCoopers, in its reports on world metal industry said.
"The emerging markets were most instrumental in deal-making and we expect that Eastern Europe, Asia Pacific and Latin America will continue to be driving forces in the industry's consolidation efforts," the PWC report said.
Russia's Severstal, the immediate competitor of CSN has already said that it is interested in acquiring assets in North and Latin America, and Asia.
"In 2007, we plan to expand both by enhancing the effectiveness of existing assets and through mergers and acquisitions," Alexei Mordashov said CEO said recently. Industry observers here believe that in the future M&A deal in the global steel sector would see Severstal will emerge as a strong opponent to the CSN.
Last year, Severstal sought a merger with the world's second-largest steelmaker, Arcelor, but the deal, inked in May, fell through when it was rejected by Arcelor shareholders, to clear the way for a takeover of the Luxembourg-based company by the world's leading steel producer, Mittal Steel.
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