Corus approves Tata's 4.3 bn pound takeover bid

London, Oct 20: The Tatas are set to become world's fifth largest steel-maker with the acquisition of Europe's second largest steel producer Corus Group for 4.3 billion pounds, at a price of 455 pence in cash for each share, making it the biggest-ever deal by an Indian company overseas.

The deal has been approved both by UK's Corus Board as also the Board of Directors of Tata Steel.

The bid is based on earnings of Corus, primarily engaged in the manufacture of semi-finished and finished carbon steel products. It earned revenues of 9.2 billion pounds in 2005 and registered crude steel production of 18.2 million tonnes primarily in UK and Netherlands.

''The takeover would be a defining moment for the firm and is entirely consistent with our strategy of growth through international expansion,'' Tata Steel Chairman Ratan Tata, who is expected to chair the new board of Corus said.

The acquisition, to be complete by mid-January, is proposed to be made by Tata Steel UK, a wholly-owned indirect subsidiary of Tata Steel, formed for the purpose.

The Tatas will be investing 3.5 billion dollars and the rest 4.7 billion dollars will be raised through the SPV.

Speaking on the funding of the deal, Tata Steel Vice President (Finance) Kaushik Chatterjee said that substantial funds were available with the company and it was sitting on significant cash.

''We are confident about the deal going through as no regulatory approvals are pending. There is certainity of funds in place with the topline addition to be done immediately and bottom line addition to be done in due course.'' The takeover will allow the cross-fertilisation of research and development capabilities in the automotive, packaging and construction sectors and transfer of technology, best practices and expertise from Europe to India.

Corus Chairman Jim Leng said the deal was the culmination of talks with firms in Brazil, Russia and India. He said, ''This combination with Tata, for Corus shareholders and employees alike, represents the right partner at the right time at the right price and on the right terms.'' Corus and Tata Steel are companies with long, proud histories.

Together we will be even better equipped to remain at the leading edge of the fast-changing steel industry, he said.

UNI