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Post by Saurabh Jain on Jan 31, 2007 12:17:33 GMT 5.5
Congratulate Tatas on Corus win
Tata Steel has finally won the bid to acquire British steelmaker Corus, outbidding its Brazilian rival CSN. It is now all set to become the 5th largest steel maker in the world. As an Indian, it must feel great that two among the world's five largest steel makers have an Indian connection.
Exuberant after a thriller deal to acquire Anglo-Dutch steel giant Corus for $11.3 billion, Tata Group supremo Ratan Tata today dubbed the victory as "a moment of fulfilment for India."
The stock price of Tata Steel continues to slide deeper into red owing to concerns of high valuations over the Corus deal.
Tata-Corus: 'Tad costly, but high potential' B Muthuraman, CEO of Tata Steel, admitted that the 608pence per share being offered for Corus "may look expensive based on 9 EV/EBIDTA (2005), but the acquisition is a tremendous strategic fit for Tata Steel."
He added that full synergy would start acruing from the third year, and would result in savings of $350 million per year.
The cost of steel at $710 per tonne would be still lower than the industry average, he added.
Kamal Nath, India's commerce and industry minister, welcomed the development, saying "this means the global perception of India is changing."
"It is a two-way street now. Not only India is seeking foreign investment but Indian companies are emerging investors in other countries," Nath said.
The winning bid for Corus is more than what India received in foreign direct investment last year.
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