TATA wins CORUS
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When Ratan Tata, Chairman of Tata house, announced the bid to acquire Anglo-Dutch steel maker CORUS during 2006 Diwali, Indian media was gung-ho about the deal and it was hailed as the biggest blitzkrieg of all time in the Indian corporate world. Tata has estimated the deal to be of 8billion USD, but as the time changed a new rival came into the picture in the name of Steinbruch’s Companhia siderugica nacional, or CSN and it challenged TATA and questioned his estimated deal. The battle was set up and TATA Steel was also ready to clinch the deal. So one fine day Tata beat his Brazilian rival steinbruch in a closely contested auction. In 8 round bidding Tata finally clinched the deal with 12 billion USD at 608 pence per share against CSN’s offer of 603 pence per share.
In one go Tata steel leapfrogged from 30 to 5th rank in the biggest steel makers’ list.
Several analysts are suggesting that TATA has gone overboard in trying to best CSN. But given TATA’s previous record it would be a matter of argument. Tata is known for his splendid comeback after each slide down due to acquisition of some big company or some landmark announcement. Also Tata has did rightly so as the acquiring a established firm was easier than establishing and expanding the new business in India specially in steel industry as acquiring land in steel rich states is hard nut to crack. However Tata steel’s share has fallen considerably just after the announcement of deal.
Acquiring CORUS will give Tata the new market in the name of Europe and it will be the leading steel making company and why not as the latest trend in the steel making industry is consolidation (Mittal- Arcelor).
The market reaction was a short term reflection as Ratan Tata said in a call with journalist "Hopefully, in the future somebody will look back and say we did the right thing."
Being an Indian i hope so…Do you?
In one go Tata steel leapfrogged from 30 to 5th rank in the biggest steel makers’ list.
Several analysts are suggesting that TATA has gone overboard in trying to best CSN. But given TATA’s previous record it would be a matter of argument. Tata is known for his splendid comeback after each slide down due to acquisition of some big company or some landmark announcement. Also Tata has did rightly so as the acquiring a established firm was easier than establishing and expanding the new business in India specially in steel industry as acquiring land in steel rich states is hard nut to crack. However Tata steel’s share has fallen considerably just after the announcement of deal.
Acquiring CORUS will give Tata the new market in the name of Europe and it will be the leading steel making company and why not as the latest trend in the steel making industry is consolidation (Mittal- Arcelor).
The market reaction was a short term reflection as Ratan Tata said in a call with journalist "Hopefully, in the future somebody will look back and say we did the right thing."
Being an Indian i hope so…Do you?
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