Tata Corus

The Deal

The deal (between Tata & Corus) was officially announced on April 2nd, 2007 at a price

of 608 pence per ordinary share in cash. This deal is a 100% acquisition and the new

entity will be run by one of Tata's steel subsidiaries. As stated by Tata, the initial motive

behind the completion of the deal was not Corus' revenue size, but rather its market

value. Even though Corus is larger in size compared to Tata, the company was valued

less than Tata (at approximately $6 billion) at the time when the deal negotiations started.

But from Corus' point of view, as the management has stated that the basic reason for

supporting this deal were the expected synergies between the two entities. Corus has

supported the Tata acquisition due to different motives. However, with the Tata

acquisition Corus has gained a great and profitable opportunity to make an exit as the

company has been looking out for a potential buyer for quite some time.

The total value of this acquisition amounted to £6.2 billion (US$12 billion). Tata Steel

the winner of the auction for Corus declares a bid of 608 pence per share surpassed the

final bid from Brazilian Steel maker Companhia Siderurgica Nacional (CSN) of 603

pence per share. Prior to the beginning of the deal negotiations, both Tata Steel and Corus

were interested in entering into an M&A deal due to several reasons. The official press

release issued by both the company states that the combined entity will have a pro forma

crude steel production of 27 million tones in 2007, with 84,000 employees across four

continents and a joint presence in 45 countries, which makes it a serious rival to other

steel giants.

The official declaration of the completed transaction between the two

companies was announced to be effective by Court of Justice in England and

Wales and consistent with the Scheme of Arrangement of the Tata Steel

Scheme on April 2, 2007. According the Scheme regulations, Tata Steel is

required