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TATA & CORUSTATA & CORUS

(A(A CASECASE OFOFAACQUISITIONCQUISITION))

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COMPANYS PROFILECOMPANYS PROFILE

Founded in 1907,byJamsetji Nusserwanji Tata.

Tata company listed on BSE and NSE and employsabout 82700 (2007) people.

started with a production capacity of 1,00,000 toneshas transformed into a global giant .

TATA SteelTATA Steel

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Its revenue in 2005-2006 was 5.0 billion US $.

It has a main steel plant located at Jamshedpur.

The Company also has three Greenfield steel projects

in the states of Jharkhand, Orissa and Chhattisgarh.

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Corus is Europe's second largest steel producer.

Corus group was formed on 6th October 1999.

Company has four divisions: Strip product , Longproduct , Aluminum and Distribution and Building

system.

CORU S SteelCORU S Steel

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Corus main steelmaking operations primarily in the

UK and the Netherland.

Corus provides innovative solutions.

It is listed on London stock exchange.

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VISIONVISION

Weaspir

eto b

ethe

global stee

l industryWe

aspire

to be

the

global stee

l industrybenchmark forbenchmark for

Value Creation and Corporate CitizenshipValue Creation and Corporate Citizenship

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CHALLENGESCHALLENGES

1. FINANCIAL ASPECTS.

2. NON FINANCIAL ASPECTS Cultural differences

Structures and Compensation models

Foreign political Environment.

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THE DEALTHE DEAL

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ABOUT THE DEALABOUT THE DEAL

TATA Acquired CORUS on 2ndApril 2007 which is 4

times larger than its size.

The deal price was $ 12 Billion.

TATA Steel,the winner of the auction for CORUS

declares a bid of 608 Pence per share.

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In 2005 when the deal was started the

price per share was 455 pence.

TATA Surpassed the final bid from Brazilian steel

maker COMPANHIA SIDERURGICA NACIONAL

(CSN) of 603 pence per share.

The combined entity has become the worlds fifth

largest steelmaker after the deal.

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For this deal TATA has finance only 4 Billion $ from

internal company resources.

TATA Have secured funding commitments from itsadvisors.

These advisors were Deutshe bank, ABN Amro and

Standard Chartered.

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IMPORTANCE OF DEALIMPORTANCE OF DEAL

The initial motive behind the deal was not CORUS

revenue size but rather its market value.

To compete on global scale because then TATA wasjust at 56th rank in steel production.

CORUS holds a number of Patents and R & Dfacility.

FOR TATAFOR TATA

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Acquiring Corus will give Tata access to European

customers of steel.

Acquisition cost will be lower then setting up new green

field plants and marketing channel.

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Saturated market of Europe.

Better facilities and lower cost of production

Employee cost was 15 % (TATA- 9%)

Profit margin was 3.4% (TATA- 17%)

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PROCESS OF DEALPROCESS OF DEAL

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 TATAs offer.

Oct 27, 06 : CORUS criticized by JCB for acceptance of TATAs 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

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Major Acquisitions

Target Buyer Value ($ bn) Year

Arcelor Mittal Steel 31 2006

NKK Corp Kawasaki Steel 14.1 2001

LMM Holdings Ispat Intl 13.3 2004

Corus TATA 12.0 2006

Krupp AG Thyssen 8.0 1997

Dofasco Arcelor 5.2 2005

Intl Steel Mittal Steel 4.8 2005

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GLOBAL STEEL RANKINGGLOBAL STEEL RANKING

COMPANYCOMPANY CAPACITY inCAPACITY in

(million tones)(million tones)

1.Arcelor-Mittal

2.Nippon steel

3.Posco

4.JEF steel

5.Tata steel- Corus

110.0

32.0

30.5

30.0

27.7

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PPOSTOSTAACQUISITIONCQUISITION

New entity will be run by one of Tatas steel

subsidiaries.

Seven members committee.

Share price of TATA

On the date of announcement 536.60

On the date of Acquisition- 464.90

Todays price- 511.35

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Tata Steel- Corus : Projected capacity

(in million tones per annum)

Corus Group (in UK and Netherlands) 19

Tata Steel- Jamshedpur 10

Tata Steel- Jharkhand 12

Tata Steel- Orissa 6

Tata Steel- Chattisgarh 5

Tata Steel- Singapore 2

Millennium Steel- Thailand 1.7

Aggregate projected capacity 55.7

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