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A Group presentation

PRESENTED
BY

SECOND SEMESTER
FIRST SEMESTER
AKANSHA SINGH, DILEEP PANDEY
SWETA SINGH,

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SUBJECT

ACQUISITION
OF
TATA STEEL & 2
NEWS FLASH

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News

• On 20 October 2006 the board of


directors of Anglo-Dutch
steelmaker Corus accepted a $7.6
billion takeover bid from Tata Steel
, the Indian steel company.

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THE INVOLVED COMPANIES

Anglo-Dutch steelmaker corus TISCO


(Tata iron & steel company ltd.)

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Glimpse on TATA STEEL

• It is part of the Tata Group of


companies.

• Tata Steel, formerly known as TISCO


(Tata Iron and Steel Company Limited)

• the world's 56th largest and India's


2nd largest steel company with an
annual crude steel capacity of 3.8
million tonnes.
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• It is based in Jamshedpur, Jharkhand, India.

• Post Corus merger, Tata Steel was India's second-


largest and second-most profitable company in
private sector with consolidated revenues of Rs
1,32,110 crore and net profit of over Rs 12,350
crore during the year ended March 31, 2008.

• The company was also recognized as the world's


best steel producer by World Steel Dynamics in
2005. The company is listed on BSE and NSE; and
employs about 82,700 people (as of 2007).

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2 minutes for corus
• Corus was formed from the merger of
Koninklijke Hoogovens N.V. with British
Steel Plc on 6 October 1999.

• It has major integrated steel plants at


Port Talbot, South Wales; Scunthorpe,
North Lincolnshire; Teesside, Cleveland
(all in the United Kingdom) and
IJmuiden in the Netherlands.

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• It also has rolling mills situated at Shotton, North Wales
(which manufactures Colorcoat products), Trostre in
Llanelli, Llanwern in Newport, South Wales, Rotherham and
Stocksbridge, South Yorkshire, England, Motherwell, North
Lanarkshire, Scotland, Hayange, France, and Bergen,
Norway.

• In addition it has tube mills located at Corby, Stockton and


Hartlepool in England and Oosterhout, Arnhem,
Zwijndrecht and Maastricht in the Netherlands.

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Synergies between the two companies

• Tata was one of the lowest cost


steel producers in the world and
had self sufficiency in raw material.

• Corus was fighting to keep its


productions costs under control
and was on the look out for sources
of iron ore.
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• Tata had a strong retail and distribution
network in India and SE Asia.

• There would be technology transfer and


cross-fertilization of R&D capabilities
between the two companies that specialized
in different areas of the value chain.

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strong culture fit between the two organizations both of which highly
• emphasized on continuous improvement and ethics.

TATA CORUS
Trusteeship Code of ethics
integrity Integrity
Respect for individual Creating value in steel
credibility and excellence Customer focus
Selective growth
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Timelines

 On October 20, 2006, Tata Steel


announced that it had agreed to pick up a
100% stake in the Anglo-Dutch steel maker
Corus at 455 pence per share in an all cash
deal, cumulatively valued at GBP 4.3 billion
(USD 8.04 billion).

 On November 19 2006, the Brazilian steel


company CSN launched a counter offer for
Corus at 475 pence per share, valuing it at
$8.4 billion.

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• On December 11, 2006, Tata preemptively upped the
offer to 500 pence, which was within hours trumped by
CSN's offer of 515 pence per share, valuing the deal at $
9.6 Billion. The Corus board promptly recommended both
the revised offers to its shareholders.

• On December 11, 2006, CSN announced a formal offer for


the Company at an offer price of 515 pence per Corus
Share , valuing the deal at $ 9.6 Billion.. The CSN
Acquisition would also be implemented by way of a
scheme of arrangement and is subject to a pre-condition
that either Corus Shareholders reject the Tata Scheme or
the Tata Scheme is otherwise withdrawn by Corus or
lapses. The Corus board promptly recommended both the
revised offers to its shareholders.

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• Also on December 19, 2006, UK
Watchdog the Panel on Takeovers
and Mergers announced that the
last date for each of Tata and CSN
to announce revised offers for the
Company, should they wish to do
so, is 30 January 2007. They also
warned that it would begin an
auction procedure if the two
remained in competition.

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•On January 31 2007 Tata
Steel won their bid for
Corus after offering 608
pence per share, valuing
Corus at $11.3bn

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Final seal structure
• $3.5–3.8bn infusion from Tata
Steel ($2bn as its equity
contribution, $1.5–1.8bn through a
bridge loan)

• $5.6bn through a LBO ($3.05bn


through senior term loan, $2.6bn
through high yield loan)

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New Board formulation
• Mr. R.N. Tata is the Chairman of Tata
Steel and Corus
• Mr. Jim Leng is the deputy chairman of
Tata Steel and Corus
• Mr. B Muthuraman, Mr. Ishaat Hussain
and Mr. Arun Gandhi to join the Corus
board

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