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Mergers, Acquisitions and Takeovers Case Study

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Case Title:

Tata Steel’s Acquisition of Corus: Was it Worth the Price?

Publication Year : 2008

Authors: Nirmal Kumar, Yogeswaran and Divya Jacob Bharathi S. Gopal

Industry: Minerals, Metals and Mining

Region:India

Case Code: MAA0160B

Teaching Note: Available

Structured Assignment: Available

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Abstract:
During 2006–2007, the Indian steel industry witnessed one of the biggest acquisitions. Tata Steel offered to buy the UK steel giant Corus. Finally, after numerous rounds of bidding, Tata Steel bought Corus for $12.9 billion. The Corus acquisition moved Tata Steel’s position to the sixth place among the world’s largest steel producers. While the Indian industry lauded Tata Steel’s move, there was national debate whether Tata Steel over paid for the Corus acquisition. The supporters of the acquisition mentioned that there were clear synergies between the two companies. Tata Steel also seemed to have long run benefits from this acquisition.

Pedagogical Objectives:

    The case study helps the students understand and analyse:
  • The growth history and the market spread of Tata Steel and Corus
  • The reasons that promoted Tata Steel to acquire Corus
  • The synergistic value between the two companies
  • The long term benefits of the Tata-Corus deal
  • Whether Tata overpaid for the Corus acquisition.

Keywords : Tata Steel; Corus, Steel Manufacturing; Acquisition; Bid; Price; Expansion; Stake; Europe; Takeover; Mergers,Acquisitions,Alliances Case Study; Low-cost producer; Tata Group; Ratan Tata; Synergy; Combined Entity

Contents : 
Tata Steel Company
Tata Steel’s global position after acquisition
Corus Group Plc
Tata Steel Takes Over Corus
Financing the Deal
Overall Financing of Corus Acquisition
Reaction to the deal
The Financial Position of Corus
Arguments for the Deal
The Combined Entity

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