A Group Presentation: Presented By

A Group presentation PRESENTED BY

FIRST SEMESTER SWETA SINGH,

SECOND SEMESTER AKANSHA SINGH, DILEEP PANDEY

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SUBJECT

ACQUISITION OF TATA STEEL &

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NEWS FLASH

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News • On 20 October 2006 the board of directors of Anglo-Dutch steelmaker Corus accepted a $7.6 billion takeover bid from Tata Steel , the Indian steel company.

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THE INVOLVED COMPANIES

Anglo-Dutch steelmaker corus

TISCO (Tata iron & steel company ltd.) 5

Glimpse on TATA STEEL • It is part companies.

of

the

Tata Group

of

• Tata Steel, formerly known as TISCO (Tata Iron and Steel Company Limited) • the world's 56th largest and India's 2nd largest steel company with an annual crude steel capacity of 3.8 million tonnes. 6

• It is based in Jamshedpur, Jharkhand, India. • Post Corus merger, Tata Steel was India's secondlargest and second-most profitable company in private sector with consolidated revenues of Rs 1,32,110 crore and net profit of over Rs 12,350 crore during the year ended March 31, 2008. • The company was also recognized as the world's best steel producer by World Steel Dynamics in 2005. The company is listed on BSE and NSE; and employs about 82,700 people (as of 2007).

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2 minutes for corus • Corus was formed from the merger of Koninklijke Hoogovens N.V. with British Steel Plc on 6 October 1999. • It has major integrated steel plants at Port Talbot, South Wales; Scunthorpe, North Lincolnshire; Teesside, Cleveland (all in the United Kingdom) and IJmuiden in the Netherlands. 8

• It also has rolling mills situated at Shotton, North Wales (which manufactures Colorcoat products), Trostre in Llanelli, Llanwern in Newport, South Wales, Rotherham and Stocksbridge, South Yorkshire, England, Motherwell, North Lanarkshire, Scotland, Hayange, France, and Bergen, Norway. • In addition it has tube mills located at Corby, Stockton and Hartlepool in England and Oosterhout, Arnhem, Zwijndrecht and Maastricht in the Netherlands.

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Synergies between the two companies • Tata was one of the lowest cost steel producers in the world and had self sufficiency in raw material. • Corus was fighting to keep its productions costs under control and was on the look out for sources of iron ore. 10

• Tata had a strong retail and distribution network in India and SE Asia. • There would be technology transfer and cross-fertilization of R&D capabilities between the two companies that specialized in different areas of the value chain.

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strong culture fit between the two organizations both of which highly • emphasized on continuous improvement and ethics.

TATA

CORUS

Trusteeship integrity Respect for individual credibility and excellence

Code of ethics Integrity Creating value in steel Customer focus Selective growth 12

Timelines On October 20, 2006, Tata Steel  announced that it had agreed to pick up a 100% stake in the Anglo-Dutch steel maker Corus at 455 pence per share in an all cash deal, cumulatively valued at GBP 4.3 billion (USD 8.04 billion).  On November 19 2006, the Brazilian steel company CSN launched a counter offer for Corus at 475 pence per share, valuing it at $8.4 billion.

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• On December 11, 2006, Tata preemptively upped the offer to 500 pence, which was within hours trumped by CSN's offer of 515 pence per share, valuing the deal at $ 9.6 Billion. The Corus board promptly recommended both the revised offers to its shareholders.

• On December 11, 2006, CSN announced a formal offer for the Company at an offer price of 515 pence per Corus Share , valuing the deal at $ 9.6 Billion.. The CSN Acquisition would also be implemented by way of a scheme of arrangement and is subject to a pre-condition that either Corus Shareholders reject the Tata Scheme or the Tata Scheme is otherwise withdrawn by Corus or lapses. The Corus board promptly recommended both the revised offers to its shareholders.

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• Also on December 19, 2006, UK Watchdog the Panel on Takeovers and Mergers announced that the last date for each of Tata and CSN to announce revised offers for the Company, should they wish to do so, is 30 January 2007. They also warned that it would begin an auction procedure if the two remained in competition. 15

•On January 31 2007 Tata Steel won their bid for Corus after offering 608 pence per share, valuing Corus at $11.3bn 16

Final seal structure • $3.5–3.8bn infusion from Tata Steel ($2bn as its equity contribution, $1.5–1.8bn through a bridge loan) • $5.6bn through a LBO ($3.05bn through senior term loan, $2.6bn through high yield loan)

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New Board formulation • Mr. R.N. Tata is the Chairman of Tata Steel and Corus • Mr. Jim Leng is the deputy chairman of Tata Steel and Corus • Mr. B Muthuraman, Mr. Ishaat Hussain and Mr. Arun Gandhi to join the Corus board

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