LONDON/MUMBAI (Reuters) - India's Tata Steel is set to become the world's fifth-biggest steelmaker after winning a battle for Anglo-Dutch steelmaker Corus Group with a 6.2 billion pounds offer.
The battle pushed Corus's share price to seven-year highs and pitted 70-year-old Tata group Chairman Ratan Tata, from one of India's best-known business families, against Benjamin Steinbruch, 52, a famous Brazilian executive who is the chief and main owner of CSN.
The deal, India's biggest ever foreign takeover, is expected to fuel a new wave of consolidation in the fragmented steel sector after Mittal Steel acquired rival Arcelor for $32 billion (16 billion pounds) last year.
Corus shares jumped 7 percent to near the bid price, but shares in Tata Steel fell as much as 10 percent as investors felt it was paying too high a price and the purchase could strain its finances.
Sterling which has been nudging the $2 mark for several weeks, could get a boost from the deal as Tata Steel looks to buy pounds to pay Corus's British shareholders.
In a hard-fought auction, Tata Steel agreed to offer Corus investors 608 pence per share in cash, a third more than its original offer and topping a final bid of 603 pence from Brazil's Companhia Siderurgica Nacional (CSN)
"Quite frankly I do feel it is both taking a short-term and harsh view... In future somebody will look back and say we did the right thing," Tata, the 70-year-old patriarch who is also a licensed pilot, told reporters in Mumbai.
By Yahoo News
Well looks like one deal which will further enhance the image of Inidian Economy. Early this week Times Of India(popular news concern) pulled out an article which raised the voice against S&P rating for Indian economy BBB- . India is becomming a huge avenue for foreign investments and we need to accolade it.
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