Presented by:

TEAM
GEORGE BERNARD SHAW
TATA STEEL
• Tata steel formerly
known as TISCO and it is
the sixth largest steel
company, with an annual
crude steel capacity of 31
million tonnes.
• It is the largest private
sector steel company in
India in terms of
domestic production.
 Cont…
• Ranked 258th on Fortune Global 500, it is based in
Jamshedpur, Jharkhand, India.
• Tata Steel is also 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 is listed on Bombay Stock Exchange and
National stock Exchange of India, and employs about
82,700 people (as of 2007).
• Tata Steel has set an ambitious target to achieve a capacity
of 100 million tonne by 2015.
 Cont…
1. 6 million tonne plant in Orissa (India)
2. 12 million tonne in Jharkhand (India)
3. 5 million tonne in Chhattisgarh (India)
4. 3-million tonne plant in Iran
5. 2.4-million tonne plant in Bangladesh
6. 5 million tonne capacity expansion at Jamshedpur
(India)
7. 4.5 million tonne plant in Vietnam.
CORUS
• The London-based Corus
Group is one of the world's
largest producers of steel and
aluminium. Corus was
formed in 1999 following the
merger of Dutch group
Koninklijke Hoogovens N.V.
with the UK's British Steel on
October 6, 1999. It employs
47,300 people worldwide and
24,000 people in the United
Kingdom.
 Cont….
• Corus is a customer focused, innovative value-driven
company, which manufactures, processes and distributes
steel products and services to customers worldwide.
• Corus is Europe's second largest steel producer with
annual revenues of around £12 billion and a crude steel
production of over 20 million tonnes.
• It is listed on the London Stock Exchange, Euronext
Amsterdam and the New York Stock Exchange.
• Corus has four divisions: strip products division,  long
products division, distribution and building systems
division, and aluminium division. Corus has an annual
turnover of $18 billion.
 OVERVIEW OF THE COMPANY
TATA STEEL CROUS
• Steel Founded 1907 • Steel Founded Koninklijke
• Headquarters Jamshedpur, Hoogovens
Jharkhand, India. N.V. in 1918
British Steel
• Key people Ratan Tata (Chairman) Corporation in 1967
B Muthuraman (Managing Merger of British Steel
Director) & Koninklijke
• Products Hot and cold rolled Hoogovens 1999
coils and sheets • Headquarters London, England,
Wire and rods UK
Construction bars
Pipes • Key people Kirby Adams,
Structurals and forging CEOMarjan
quality steel. Oudeman,
• Revenue ▲ US$32.77 billion • Steel Revenue £10,142 million (2005)
(2009) • Operating Income £680 million
• Total Assets ▲ $31.16 billion (2005)
(2009) • Net Income £451 million (2005)
• Employees 86,548 (2009) • Employees 50,000
 Merge Deal
• The board of directors of Anglo-Dutch steelmaker Corus has
accepted a $7.6 billion takeover bid from Tata Steel, the two
sides confirmed on Friday.
• The deal is the largest Indian takeover of a foreign company and
will create the world's fifth-largest steel group.
• In 2005, Tata Steel was only the world's 56th biggest steel
producer and its takeover of Corus represents its first expansion
outside Asia.
• "The board has recommended Tata Steel's offer. We are hopeful
that the shareholders will accept it," David Jackson, director
(communications) of Corus, told CNBC-TV18 news channel on
Friday.
• Tata Group chairman Ratan Tata also confirmed that it has
agreed to acquire the European steel company at 455 pence per
share, putting the enterprise value of Corus at about $10 billion.
 Cont…
• "This proposed acquisition represents a defining moment for Tata
Steel and is entirely consistent with our strategy of growth through
international expansion," Tata said.
• Jackson said the deal comes at the "right time and at the right price"
and expressed hope that shareholders as well as trade unions would
respond positively to the offer.
• As per the agreement, 75 per cent of Corus shareholders would have
to tender their shares for the acquisition to be complete.
• "The combined entity will have a turnover of $32 billion by 2011-12
with an EBIDTA margin of 25%," Muthuraman said.
• He also discussed the six-pronged strategy outlined by Tata Steel in
2003 where the target was to increase capacity from 4 million tonne
then to 30 million tonne by 2015.
• The $8 billion Tata Steel-Corus deal would be at No 5 among the top
deals witnessed by the steel industry over the last couple of years.
 NEGOTIATION BY TATA
 September 20, 2006 : Corus Steel has decided to acquire a
strategic partnership with a Company that is a low cost
producer
 October 5, 2006 : The Indian steel giant, Tata Steel wants to
fulfill its ambition to Expand its business further.
 October 6, 2006 : The initial offer from Tata Steel is
considered to be too low both by Corus and analysts.
 October 17, 2006 : Tata Steel has kept its offer to 455p per
share.
 October 18, 2006 : Tata still doesn’t react to Corus and its bid
price remains the same.
 October 20, 2006 : Corus accepts terms of £ 4.3 billion
takeover bid from Tata Steel
 October 23, 2006 : The Brazilian Steel Group CSN recruits a
leading investment bank to offer advice on possible counter-
offer to Tata Steel’s bid.
 Financing of the Deal
TATA- CORUS Deal - $12 billion
Equity Contribution from Tata Steel- $3.88 billion
Credit Suisse leaded, 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.
Major Acquisitions – Big Deals
TARGET BUYER VALUE($bn) YEAR
Arcelor Mittal Steel 31 2006
NKK Corp Kawasaki Steel 14.1 2001
LNM Holdings Ispat Intl 13.3 2004
Tata Corus 12 2006
Krupp AG Thyssen 8.0 1997
Dofasco Arcelor 5.2 2005
Intl Steel Mittal Steel 4.8 2005
 ACQUISITION
 TATA-CORUS
 Tata acquired Corus, which is four times larger than its size and
the largest steel producer in the U.K. The deal, which creates the
world's fifth-largest steelmaker, is India's largest ever foreign
takeover and follows Mittal Steel's $31 billion acquisition of rival
Arcelor in the same year.
 Tata acquired Corus on the 2nd of April 2007 for a price of $12
billion. The price per share was 608 pence, which is 33.6% higher
than the first offer which was 455 pence.
 POST MERGE OF THE COMPANY:
 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.
 Tata had a strong retail and distribution network in India and SE Asia.
This would give the European manufacturer a in-road into the
emerging Asian markets.
 Tata was a major supplier to the Indian auto industry and the demand
for value added steel products was growing in this market. Hence
there would be a powerful combination of high quality developed and
low cost high growth markets
 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
First 100 Days: Conflict Points

Time Factor
Leadership style differences
Who’s in charge? (Who won?)
Open vs. closed communication
Decision making speed & style
FINANACIAL ANALYSIS
Particulars Corus Currency: TATA Steel Ltd Currency
Year 2006 2005 2006 2005

ASSETS 582750.00 533925.00 205,450.70 177,033.10

DEBTS 98100.00 105525.00 45,932.70 42,073.10

LIABILITIES 231300.00 178425.00 30492.10 33146.80

REVENUE 760500.00 699900.00 202,444.30 159,986.10

NET INCOME 33900.00 33450.00 37,346.20 36,032.60

 STRATEGY: DISCIPLINES, PRIORITIES

CUSTOMER
OPERATIONAL PRODUCT
INTIMACY
EXCELLENCE LEADERSHIP

•Competitive price •Easy to do business

•New products or
•Error free, reliable with
services
•Fast (on demand) •Have it your way
•Risk takers
•Simple (customization)
•Meet volatile
•Responsive •Market segments of
customer needs
•Consistent one
•Learning
•Proactive, flexible
information for all organization
•Once and Done' •Cross selling
 CONCLUSION:
With Corus in its fold, Tata Steel can confidently target
becoming one of the top-3 steel makers globally by
2015. The company would have an aggregate capacity of
close to 56 million tones per annum, if all the planned
Greenfield capacities go on stream by then.
We can conclude that if the acquisitions well planned ,
Executed and the necessary precautions taken for the
deal a company can achieve its strategic objectives and
thus ensure its growth through Acquisition.