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Chronology of the event

• Sep 20, 06 : CORUS uses the strategy to work with low cost producer.
• Oct 06, 06 : Initial offer by TATA is considered to be too low.
• Oct 17, 06: TATA kept its offer to 455 pence per share.
• Oct 20, 06 : CORUS accepts the offer of £4.3 billion.
• Oct 23, 06 : Brazilian Steel Group CSN counter-offer to TATA’s offer.
• Oct 27, 06 : CORUS criticized by JCB for acceptance of TATA’s offer.
• Nov 18, 06 : The CSN approaches Corus With an offer of 475 pence
per share
• Nov 27, 06 : Board of Corus decides to give more time for shareholders
to decide whether it issue forward a formal offer.
• Dec h18,06 : Tata increases its original bid for Corus 500 pence per
share, then CSN made its counter bid at 515 pence per share in
cash
• Jan 31, 07 : Tata ad agreed to offer Corus investors 608 pence per
share in cash
• Apr 02, 07 : Tata steel manages to win acquisition to CSN and has the
full voting support from Corus shareholders
Synergies for Corus
• Global Reach
• Total debt of Corus as on the date of acquisition-
GBP1.6 Billion
• Corus needed supply of raw materials at lower
cost
• Though Corus had revenues of $18.06bn, its
profit was a mere $626mn compared to Tata’s
revenue of $4.84bn and profit of $824mn
• Production facilities of Corus were relatively old
with high cost production
• Employee cost is 15% (Tata 9%)

Synergies for TATA
• Tata has been looking to manufacture finished products in
mature markets like Europe
• Diversified product mix
– Reduces risks
– Higher end products will add to bottom line
• Corus holds a number of patents and R&D facilities and
immediate access to advanced technology
• Greenfield plant
– Cost
– Time
• Will catapult Tata from 55th largest producer to 5th largest.
• Will make it difficult for other companies to make a hostile
bid for TS
Pre and Post acquisition

•Share price of Corus


ØOn the date of announcement – 360.5 Pence/share
ØOn the date of Acquisition-
•Share price of TATA
ØOn the date of announcement –536.60
ØOn the date of Acquisition- 464.90
ØToday’s price- 511.35

Financing the deal
• Tata Corus deal – $12.1 Billion
• Contribution from Tata Steel - $3.88 Billion
– $2bn equity
– $1.8 bn Bridge loan
• Lead by credit Suisse, later joined by ABN
AMRO and Deutsche Bank in the
consortium
• Of the $ 8.12 billion of financing , Credit
Suisse provided 45% and ABN AMRO and
Deutsche provided 27.5% each.