INDIA'S Tata Steel landed the winning blow today in the auction of former British Steel company Corus.
Tata offered 608p a share, valuing Corus at £5.75 billion, after going head to head with Brazil’s CSN in a late-night process run by the Takeover Panel.
The battle with CSN, which dates back to December, added a third to the price offered by Tata when it unveiled its original deal with the Anglo-Dutch firm in October. It is the largest ever overseas takeover by an Indian firm.
The deal will create the world’s fifth largest steel group, capable of producing about 24 million tonnes of steel a year.
CSN bowed out of the auction after offering 603p a share. Prior to the start of the final auction, which began at 4.30pm, CSN held the recommendation of the Corus board with a previous offer worth 515p a share, or £4.9 billion.
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 £580 million on turnover of £10.14 billion, although lower selling prices and higher costs hit operations in the first half of this year.
Corus, which was set up through the merger of British Steel and Dutch rival Hoogovens in 1999, employs 47,300 people worldwide including 24,000 in the UK at sites including Scunthorpe, Rotherham and Port Talbot. CSN and Tata had both said their takeovers would have no immediate impact on jobs.
Corus has been looking to link up with a low-cost rival as rising raw material and energy costs in the UK and the Netherlands chipped away at profits.
Last year Tata Steel, part of the Indian conglomerate Tata Group, was ranked 56th in the list of steel makers around the world with output of 5.3 million tonnes.
Tata Steel is part of a group which has operations in more than 54 countries across six continents. Tata’s steel arm was set up in 1907 and is now India’s biggest private sector steel firm.
The company claims to be among the lowest-cost steel makers in the world and its products are targeted at the automotive and construction industries.