Mergers, Acquisitions and Takeovers Case Study

Tata Steel’s Corus: Making of a Deal

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Abstract:
Tata Steel, globally the 56th largest steel maker and second largest steel maker of India, bid for Anglo-Dutch steel maker, Corus, the ninth largest steel maker globally. The bid was initially perceived as an audacious business strategy, where a smaller company plans to acquire a bigger one. However, when it was perceived that Tata Steel almost bagged the deal, CSN, the largest steel maker of Brazil and 49th largest globally made a counter bid to acquire Corus. Lastly, after a nine round of bidding process Tata Steel outbid CSN and acquired Corus. The merged entity would be globally the fifth largest steel maker with enviable market presence spread across the world. Apart from increasing capacity and market share, there are also strong synergies in financial, operational and production facilities. However, since the $12 billion acquisition cost was on the higher side, analysts perceived that it might be difficult for Tata Steel to leverage the high cost of acquisition. Apart from that there are issues like post merger integration, racial and cultural imbalances, managing 87,000 employees and the volatile steel prices.

Pedagogical Objectives:

• To the bidding process.
• To strategic synergies and rationale behind the acquisition.
• To problems Tata Steel might have to make the integration process a successful one.
• To the future of the global steel industry.

Keywords : Tata Steel, Corus, Arcelor-Mittal Group, Global steel industry, Steel industry valuechain, Backward integration, Forward integration, Nippon Steel, Merger and acquisition, English auction, First price sealed bid, Tata-Corus, Consolidation in global steel industry, Fragmented global steel industry, Primary steel making

Contents : 
Tata Steel and Corus: Marriage Made in Heaven
Cost of Corus war: A Price Too High?
CORUS Acquisition: It Takes a Whole lot to Sing a Perfect Chorus
Tata Group: Consolidating its Presence Globally
The Bidding War for Corus
The big league of global steel industry
Tata-Corus: How They Stack Up
Tata-Corus: Global Spanning