Tata and Corus are two major players in the global steel industry. Tata is an Indian multinational conglomerate company that is headquartered in Mumbai, India. It was founded in 1868 by Jamsetji Tata and has since grown to become one of the largest and most diversified companies in the world, with operations in over 100 countries. Tata is known for its wide range of products and services, including steel, automotive, communications, energy, and more.
Corus is a British multinational steel company that was formed in 1999 through the merger of British Steel and Koninklijke Hoogovens. It is headquartered in London, UK, and is a major producer of steel products, including hot and cold rolled steel, galvanized steel, and more. Corus is known for its high-quality steel products and its commitment to sustainability and environmental responsibility.
In 2007, Tata made a significant move in the global steel industry when it acquired Corus for a reported $12.9 billion. This acquisition made Tata the fifth-largest steel producer in the world and helped to further expand the company's global reach and influence.
Since the acquisition, Tata and Corus have continued to operate as separate entities, with Tata focusing on its operations in India and Corus focusing on its operations in Europe. However, the two companies have also worked together to share expertise and resources, including research and development, and to jointly develop new products and technologies.
One example of this collaboration is the Tata-Corus Advanced Manufacturing Research Centre, which was established in Sheffield, UK, in 2010. This research centre brings together experts from both companies to work on projects related to advanced manufacturing techniques and technologies, including 3D printing and robotics.
Overall, the acquisition of Corus has been a major success for Tata, helping to further expand the company's global presence and position as a leader in the steel industry. It has also allowed Tata and Corus to work together to develop new technologies and products, which has benefited both companies and their customers.
Tata
AFX News Limited, TFN. The lack of opposition to the Tata-Corus deal is because Tata Steel is paying a good price. Overbidding or not is subjective when it comes to a judgement call. The process of Acquisition The process of the acquisition began on September 20, 2006, and ended on July 2, 2007. Bij Tata Steel IJmuiden loopt het onderzoeksproject HIsarna. On October 5, 2006, Tata Steel confirmed its interest in acquiring Corus. In simple terms, what the company is saying is that cheap Chinese steel dumped across the globe has rendered the business unviable in the face of the continuing financial crisis impact.
Tata to takeover Corus. Ratan N Tata was the chairman of Tata Sons, the holding company of the Tata group, from 1991 till his retirement on December 28, 2012. He observed "Firstly, it Corus immediately comes in with a capacity of 19 MTPA at a cost of little more than half of what a similar Greenfield site would. Many of those fears were proven right as within a year, the global economy collapsed following the financial crisis and that coupled with Chinese protectionism impacted demand. The business never went back to that level of operating profit after that. Tata, Steinbruch on global footing.
Over the next six months the stock fell 21 percent. GET INSTANT HELP FROM EXPERTS! Geraadpleegd op 31 mei 2022. This fell 60 percent to Rs 4,951 crore in the next year. Exhibit — 7 shows the details of steel production by different companies of the world That is where companies like Tata Steel may be able to play a vital role. To achieve this there are many expansion corporate strategies like mergers, acquisitions, joint ventures, and strategic alliances. The only ones unimpressed by it all were the stock markets, which fretted over the high cost of the bid and what it might do to Tata Steel's balance sheet. Tata is on the international advisory boards of Mitsubishi Corporation and JP Morgan Chase.
Tata acquired Corus steel : an acquisition you must know about
On the other hand, Corus, the acquired firm, was formed on October 6, 1999, with the merger of Dutch group Koninklijke Hoogovens N V and UK's British Steel Plc. Knight Ridder Tribune Business News. Tata Steel in Europe was formerly known as Corus and rebranded as Tata Steel in 2010. There were many benefits to Tata Steel when the transaction was concluded, and Chinese consumption led the international market to be highly bullish. International Herald Tribune January 30, 2007. Financial Times Asia Edition. At that time it was the biggest foreign acquisition by an Indian company.
Statements from Tata Steel on reports regarding Corus acquisition
Considering the business scenario, it made business sense for only a handful of worldwide global giants to exist in the global steel industry. Chaudhuri points out that most of the steel market is based on tenders, which is much easier to tap than consulting or advisory contracts. Tata was the chairman of major Tata companies, including Tata Motors, Tata Steel, Tata Consultancy Services, Tata Power, Tata Global Beverages, Tata Chemicals, Indian Hotels and Tata Teleservices. Steel manufacture in the UK collapsed in July 2011 with a flat line in the seven months. In contrast, the top five steel producers command less than 20% of the world market.
However, the demand decreased in subsequent years 2010 and 2015 the growth was around 4. As a result, the Dutch operations Ijmuiden became a world-class unit while British Steel continued to be a drag. It was formed by merging British Steel and Dutch Koninklijke Hoogovens on 6th October 1999,. But experts said that in the long term, there was a strong possibility that consolidation may take place, which would benefit the industry by offering greater pricing power, lower cost structure, partly helped by the fact that the US dollar continued to decline. India Knowledge at Wharton spoke with Wharton professors and steel industry experts for glimpses of what lies ahead. Visit our global operations website to read more about the long and successful history of For more background on the merger which saw the creation of Corus and the history of its predecessor companies please see the documents below. But driven by the ambitions of its chairman Ratan Tata it aimed to be among the global leaders in the sector.
The fact that there were three CEOs since acquisition didn't help. According to the IIFL Wealth Hurun India Rich List 2022, the former Tata Group head had 118 lakh followers on social media platform Twitter and is the most followed entrepreneur from this list. Tatas investments driven by trust, stakeholder value. The acquisition of Corus Group Plc was based on the long term strategy of the Company to pursue growth through international expansion and enhance the portfolio of value added products. While it is the Chinese dumping that brought Tata Steel down, it is the boom in the Chinese auto market that boosted JLR's fortunes.
Tata Steel's Acquisition of Corus (M&A), Finance (Case Study)
Anonymous 2007, April 1, 1. Tata Steel emerged as the fifth largest steel producer in the world after the acquisition. The acquisition was preceded by an unprecedented takeover battle with Brazilian major CSN. Fish attributes the softening in steel prices to oversupply. What will all these factors mean for the Tata Steel-Corus merger? This dilution may lower per-share earnings, which might impact the share prices in the next year or so. It has been going downhill ever since.
Post 2004 saw an increase in worldwide demand for steel as a result of which, steel prices started rising. The investment was made in a climate when there was a tremendous buzz about outward foreign direct investment FDI , a time when a clutch of Indian industrialists were persuaded to see value in making foreign investments at extremely heady prices, which were sought to be justified on the basis of over-optimistic profit projections and growth forecasts for the world economy. The sudden and unprecedented scale of the global financial crisis in 2008 had a very significant adverse impact on the industry fundamentals in Europe which also impacted the performance of Corus. As per IISI forecast, the demand for steel globally would be 1. Tata Steel is a vertically integrated Steel company whose principal business is the manufacture of semi-finished carbon steel products at plants in India and South-East Asia. Cartelization in the global steel industry is another factor that will affect Tata-Corus, says Tiffany. It meant a cash outflow from Tata Steel in the amount of £1.
The government has honoured Tata with its second-highest civilian award, the Padma Vibhushan, in 2008. Tata Steel share price on the BSE has more than halved from Rs 693. With demand for steel not growing at a rapid rate, top steel players were thinking of merging in order to consolidate. Exhibit — 6 provides the details of steel production by Tata in India Global Steel Industry Being a cyclical industry, you see ups and downs in the steel industry every few years. Cheap raw material, prized high-value markets, high steel prices, robust demand, and lots of money to finance the deal. After the transaction, the acquired company operates as a part of the acquiring company.
