ACQUISITION

Submitted by
Shalini pandey
 INTRODUCTION
 The purchase of one corporation by another, through
either the purchase of its shares, or the purchase of its
assets.
 Acquisition is the process through which one company
takes over the controlling interest of another company.
 A corporate action in which a company buys most, if not
all, of the target company's ownership stakes in order to
assume control of the target firm. Acquisitions are often
made as part of a company's growth strategy whereby it
is more beneficial to take over an existing firm's
operations and niche compared to expanding on its own.
Acquisitions are often paid in cash, the acquiring
company's stock or a combination of both.
 REASON FOR ACQUISITION
The basic three reason for acquisition are:
 Synergy
2+2=5, total value of firms after M&A is greater than their simple
arithmetical sum
 Strategic fit
To improve the position in the market
To fill the large gap of planned and achieved growth
going abroad
 Basic Business Reason
More feasible than internal investment
Diversification
TATA CORUS ACQUISITION
 INTRODUCTION
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. The following months saw a lot of
negotiations from both sides of the deal. Tata Steel's
bid to acquire Corus Group was challenged by
CSN, the Brazilian steel maker. Finally , on January
30, 2007, Tata Steel purchased a 100% stake in the
Corus Group at 608 pence per share in an all cash
deal, cumulatively valued at USD 12.04 Billion. The
deal is the largest Indian takeover of a foreign
company and made Tata Steel the world's fifth-
largest steel group.
 WHY ACQUISITION TOOK
PLACE?
 Tata lowest cost steel producers in the world self sufficiency in raw material.
Corus high productions costs under control look out for sources of iron ore.
 Tata 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
 There was a strong culture fit between the two organizations both of which
highly emphasized on continuous improvement and ethics. Tata steel's
Continuous Improvement Program ‘Aspire’ with the core values :Trusteeship,
integrity, respect for individual, credibility and excellence. Corus's
Continuous Improvement Program ‘The Corus Way’ with the core values :
code of ethics, integrity, creating value in steel, customer focus, selective
growth and respect for our people.
THANK YOU