Tata Takes On Corus $10billion Deal

[Bull]

As far your comments as me not knowing about corus or what i said about its valuation being around 180 million not very long ago....only proves the point i started this post with. DO you have any proof what i said was wrong? no you didnot....do you even know the old name of Corus??? ( i do..since i was a sharesholder of it in its old name ). In the last 3 years ( first quarter 2003 ) at one point corus shares fell to 4p...yes 4p ( that was even below 180 million ) and it looked like corus was going to be bankrupted out of existance....its saviour came not from steal business but alumium plant which was sold to make ends meet and keep it float ( in addition to job cuts and steal plant closure at some sites )......then the price of steal increased ( due to china sucking in huge amounts of steal...china will be exporting steal next year....hence corus bad days are only round the corner ). .

have u heard the word ..." re-structuring"???

Corus deal is good for the shareholders.....if indians are ever going to see a penny of profit then they will have to swallow the steal it produces themselves....since almost everyone else can and will be getting ( and will be getting from china ) cheaper steal..

So you mean to say the workds fifth largest steel makeer is going to die down.God help the world.

As far as any other bidder coming....this is mere attempt to squeeze more money out of indians or to keep them firm to take corus...thinking they have achieved something....the fact is if corus had been worth its salt in the truest sense the russians with far more deeper pockets than TATA would have taken it a year ago, when it was on offer for half the amount indians are paying now ( yes half the amount ). .

Its russians which helped Mittal acquire arcelor.You know how?
If a russian company had bid for corus,TATAs could have got it cheaper.

 

[Bull]

Quite impressive! :thumbsup:
Whats is Ironore and steel production on Indian soil Bull?
Please update me.
Thanks!

Estimated iron ore production in million tons for 2004

Country Production
China_______ 280
Australia ____220
Brazil _______220
India _______110
Russia_______ 95
Ukraine______ 66
United States _54

Total world___ 1250

 

[Bull]

Nothing was refuted in substance by any indian.......your still welcome to have a go......but my advice is you go and check corus share graph for the last 5 years.

http://www.pakistaniforces.com/forums/showpost.php?p=31628&postcount=17

 

[Bull]

but my advice is you go and check corus share graph for the last 5 years.

can u tell me whats ur view point regarding the share price movement for the past 5 years?

 

[Bull]

Corus deal is good for the shareholders.....if indians are ever going to see a penny of profit then they will have to swallow the steal it produces themselves....since almost everyone else can and will be getting ( and will be getting from china ) cheaper steal..

oh please my god....why dont u restrict your expert comments to your field of understanding

"In 2006, the global steel demand/supply balance is forecast to remain tight by historical standards. Demand remains robust and whilst growth continues to be underpinned by China, it is expected to be more evenly distributed than 2005, with strengthening demand in both North America and Europe."

 

[Bull]

of the 4.5 billion price of corus.....2 billion is added purely due to market speculation in the last 6 months itself ( when the russian rumors were abound..these rumours added about 1.5 billion dollars as bid was expected..which never came....then the indian rumour started which made the share price jump further adding another 500 million pounds or so....

Can you fill it up for me Skeptic?

Todays price of corus:494p
6 months back share price:??
all time low price:??

 

[Skeptic786]

Can you fill it up for me Skeptic?

Todays price of corus:494p
6 months back share price:??
all time low price:??

bull bro, thanks for your pm. here is the response to your queries.

follow the link

http://www.citywire.co.uk/Shares/ShareFactsheet.aspx?InstrumentID=106375

go towards the bottom of the page....the citywire ( financial site from uk ) will show you corus shares graph which will answer your questions. If you change the option and ask it to plot the graph for corus shares for the last 4 or 5 years you will come to know that....everything i claimed in my earlier posts was true...regarding the valuation of corus. In March 2003....corus shares fell to 4 p during the day before closing at 6p. In Jan 2006 ( this is this year) the Shares of corus were at their highest for about 5 years ..that is around 100p (look at the graph for yourself ).


Furthermore regarding steal market dynamics which came under critism from you when i said....tata will have to swallow steal corus produces back into india...since everyone else will be getting cheaper steal and yes china is coming on the market as exporter next year. If you google around you will find confirmation of this too....specially regarding china becoming net exporter of steal next year. Cost of producing steal by corus in UK is alot higher than it costs chinese to produce it in china,russians in russia, mittal in eastern europe or for that matter TATA in india....corus doesnot fair well in the competitive game.....therefore if corus is to have long term future....then its new owners will have to find buyers in India for its steal...since there will be other suppliers in the international market providing it much cheaper....hence the urgency on the part of current owners of corus to offload it to TATA or anyone else prepared to take from their hands. Save for the last two years Corus was running loses to the tune of 250-500 million pounds ( 400-800 million dollars per year)....hence now is the perfect opportunity to sell it on from the british perspective. As i said before...it is to be noted that russians turned away from buying corus for half the amount...TATA is dishing out....there are ofcourse valid reasons behind the russian decision. There maybe even more compelling reasons for TATA to take on corus.....maybe they are confident that indian economy will explode to the level of sucking in all the steal they produce in conjuction with corus ( like china did in the near past )....which is not that bad a bet to make...considering india has been growing at a healthy pace so far.

 

[Contrarian]

guys stop debating the corus acquisition,,,,neither you nor me have bought the company...im sure Tata would have looked at all these things before buying corus out. They are a bloody succesful business company, they cannot be foolish, plus they had ABN AMRO and deutche bank as advisors, so all these things would have been considered before hand. These are very very capable banks.

 

[Bull]

bull bro, thanks for your pm. here is the response to your queries..

Thanks for replying...

go towards the bottom of the page....the citywire ( financial site from uk ) will show you corus shares graph which will answer your questions. If you change the option and ask it to plot the graph for corus shares for the last 4 or 5 years you will come to know that....everything i claimed in my earlier posts was true...regarding the valuation of corus. In March 2003....corus shares fell to 4 p during the day before closing at 6p. In Jan 2006 ( this is this year) the Shares of corus were at their highest for about 5 years ..that is around 100p (look at the graph for yourself )..

There was merger of shares in 2006,1 for every 5, which makes the price in March 2003 to 30p ( and not 6p)

If you google around you will find confirmation of this too....specially regarding china becoming net exporter of steal next year. .

Ok let me get this clear.China is going to be netexporter of steel .If you read the latest reports a part of which i quoted it says the earning prospects for steel companies would be robust inspite of demands slowing down in China,but will be compensated by the increasing demand from Europe and US.

Cost of producing steal by corus in UK is alot higher than it costs chinese to produce it in china,russians in russia, mittal in eastern europe or for that matter TATA in india....corus doesnot fair well in the competitive game.....therefore if corus is to have long term future....then its new owners will have to find buyers in India for its steal...since there will be other suppliers in the international market providing it much cheaper....hence the urgency on the part of current owners of corus to offload it to TATA or anyone else prepared to take from their hands. .

Tata has cheap reserves,Corus has tech.Synergy is better.Analysts are upbeat about this merger than the Mittal-arcelor one.

Save for the last two years Corus was running loses to the tune of 250-500 million pounds ( 400-800 million dollars per year)....hence now is the perfect opportunity to sell it on from the british perspective..

This company was created in 1999,and was in the process of restructuring.It came out of areas were it was not competent.

maybe they are confident that indian economy will explode to the level of sucking in all the steal they produce in conjuction with corus ( .

i dont think so.If they wanted to address the Indian market,they could have expanded their exisiting facility in jamshedpur.

One more reason which we hadnt dicussed is that,TATA was worried with the entry of Mittal into the Indian sphere and LM's comment that they will buy into steel players in India.

TATA steel is too small to ward of a take over bid from Mittal,but by acquiring Corus they have made the job even more difficult.

After swallowing a big fish Arcelor ,i (and TATA ) dont think they will have appetite for another big fish.

 

[Bull]

Some more points supportign the deal:

1.the industry is highly fragmented which leades to very poor bargaining power,now with the consolidation their bargaining power increases.

2.TATA has access to low-cost raw materials in Asia. It is considered one of the lowest-cost producers of steel slabs, an intermediate product, which could conceivably be imported into Corus' system for finishing and sale.

3.Corus wont be able to continue the same level of performances as it is been overwhelmed by mittal-arcelor.The savings mittal-arcelore deal would make to the tune of $1.6Bn is as big as the operating profit of Corus.

4. a recent investor conference in London, Lakshmi Mittal, Arcelor Mittal's main shareholder and president, reckoned that smaller European companies would be under pressure to join the consolidation wave that is sweeping the industry. "Onlyare low-cost producers, will continue to survive" he said

5.Acquiring Corus would give Tata access to the Western European market and to advanced steel-making technology

6.Tata's can radically makeover higher-cost Corus operations, such as those in Britain, without stirring up a firestorm among the company's 47,300 employees by saying as much

7.The price would peg Corus at about $520 per ton of capacity compared to the roughly $1,000 a ton that Arcelor paid for Canadian steelmaker Dofasco earlier this year.

 

[Skeptic786]

To Bull,

i have read both of your above posts and accept the points you made as having weight to them. The one point i am going to elaborate on is the lowest ever closing price of corus. If you ask the system to plot share performance for 5 years for corus;

http://www.citywire.co.uk/Shares/ShareFactsheet.aspx?InstrumentID=106375

and then look below the two graphs you will find the following informaton:

5 year low: 6p on 12-Mar-03

I know you have taken into account the share merger of 5 > 1 to conclude that the lowest price adjusted should be 30 p ( 6 x 5 ).....but the fact remains on 12 March 03 the shares in their real life before ( 5 > 1 ) did infact fall to closing price of 6p. I remember the day as if it was just yesterday........... On the 7 March 2003 edition of Investor's chronicle i remember perfectly well.....had the recomendation of a Strong Buy for Corus....on friday when the edition came out the shares were around 20p......by Tuesday evening they closed at 18 p......then came wednesday morning when they opened at 4p ( overnight it became clear sale of aluminium plant was not getting thru )......i donot think they climbed back to 18p for many months...all the poor souls which followed the experts at Investors chronicle must have cursed the moment they set their eyes on the magazine.

 

[Bull]

Brazilian steelmaker CSN says it has agreed to buy Anglo-Dutch Corus for £4.9bn ($9.6bn), beating an offer from India's Tata Steel made hours earlier.
Companhia Siderurgica Nacional has agreed to pay 515 pence a share per Corus share, trumping Tata Steel's offer of 500 pence a share.

A Corus spokesman said the board was recommending that shareholders now accept the CSN offer.

Tata said it was now considering its position after the latest developments.

The escalating bid battle sent Corus shares up 5.5% to 527.75 pence in morning trade.

'Winning combination'

A merger of Corus and CSN would create the world's fifth-biggest steel firm, with output of 24 million tonnes annually.

CSN chairman and chief executive Benjamin Steinbruch said: "The strategic impetus for this combination is growth - growth in Brazil, in Europe and for our combined workforces.

"Our goal is to unlock the value of our iron ore assets through Corus, transforming them into cost-effective, high-quality steel products using Corus' advanced engineering capabilities and its excellent European distribution platform.

"This is a winning combination for all stakeholders."

He said a tie-up would enable Corus to secure supply of high quality, low-cost iron ore from CSN's Casa de Pedra mine, one of the largest in the world.

He said a deal would also provide Corus with access to increasing quantities of low-cost semi-finished steel.

'Strong platform'

Corus chairman Jim Leng, who had backed the latest Tata offer on Sunday night, approved the CSN bid on Monday.

"This offer is both higher than the initial proposal by CSN as well as the revised Tata offer of 500p a share," he said.


"It is also consistent with our strategic objective of securing access to raw materials, low-cost production and growth markets.

"The combination of the two businesses will create a strong platform from which to compete and grow in an increasingly global market."

If successful in its latest approach, CSN will pay £138m immediately into the Corus Engineering Steels pension scheme and increase the contribution rate to the company's larger British Steel pension scheme from 10% to 12% until March 2009, it said.

Tata Steel had earlier said it would fill the $240m (£123m) deficit in the Corus pension scheme immediately and would increase contributions to the British Steel scheme, which is in surplus.

Increased offers

Late on Sunday night Corus had earlier accepted a revised £4.7bn ($9.2bn) takeover offer from Tata Steel. The offer had valued Corus at 500 pence a share.

"Clearly, CSN is able to realise more synergies than Tata," said Rabobank analyst Richard Brakenhoff.

Corus employs 47,300 people worldwide, including 24,000 in the UK at plants at Port Talbot, Scunthorpe and Rotherham.

It was formed out of the 1999 merger of British Steel and Dutch group Hoogovens.

Earlier in the autumn Tata had made an informal £4.1bn approach for Corus, but this was then trumped by CSN going to the Anglo-Dutch firm with a £4.3bn takeover proposal.

Tata chairman Ratan Tata had said any takeover would have been a "defining moment" for the firm.

The battle for Corus comes amid growing consolidation in the global steel industry.

With prices and demand soaring, Mittal Steel - the world's largest steel firm - bought European rival Arcelor for $34bn earlier this year.

 

[Bull]

India's Tata wins race for Corus


Indian firm Tata Steel has won the battle to take over Anglo-Dutch steelmaker Corus.

Tata's bid for the European steelmaker, which was created from the merger of British Steel and Hoogovens, beat that of its Brazilian rival CSN.

Britain's Takeover Panel said Tata had won after offering 608p per share, valuing Corus at £5.75bn ($11.3bn).

Corus employs 47,300 people worldwide, including 24,000 in the UK at plants at Port Talbot, Scunthorpe and Rotherham.

Tata, which is based in Mumbai (Bombay), previously said its takeover would not lead to job losses in the first phase.

The takeover will create the world's fifth-largest steel group.

'Big player'
Tata Steel director JJ Irani said the acquisition of Corus would help "improve our negotiating power in the global steel market."

He told India's NDTV television: "From a small player, we will now become a big player in the world market."

Yet shares in Tata Steel fell 6% in morning trading in Mumbai, as investors worried about the deal's short term financial impact on the Indian firm.

Meanwhile, Corus shares were up 7% in early Wednesday trading in London.

India's Commerce and Industry Minister Kamal Nath welcomed the deal and said: "It is a two-way street now. Not only India is seeking foreign investment, but Indian companies are emerging investors in other countries."

The two-way battle for the firm began in October when Tata tabled a £4.1bn bid for the group and, in December, the Corus board recommended a revised £4.7bn offer from Tata.

But, just hours later the board confirmed it had approved a £4.9bn, offer from Rio de Janeiro-based CSN.


Tata eventually outbid its Brazilian rivals.

Wider Indian group

Last year Corus was the ninth-largest steel producer in the world with 18.2 million tonnes of output.

It banked pre-tax profits of £580m on turnover of £10.14bn.

Tata Steel, part of the Indian conglomerate Tata Group, was last year ranked 56th in the list of steelmakers around the world with output of 5.3 million tonnes.

The Tata Group - which owns Tetley tea and Daewoo cars - has operations in more than 50 countries.

 

[Adux]

608p/shares

 

[Bull]

The Tata Group - which owns Tetley tea and Daewoo cars - has operations in more than 50 countries.- BBC

That info is wrong TATA doesnt own Daewoo cars it went to GM, TATA owns Daewoo's commercial vehicles.