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Established in 1907
Production of steel in India increased from 1.1 million tonnes to 51.9million tonnes in 2006
Sep 20,06
Oct 5,06
The Indian steel giant, Tata Steel decides to expand its business further.
The initial offer from Tata Steel is considered to be too low both by Corus. Tata Steel has kept its offer to 455p per share. Tata still doesnt react to Corus and its bid price remains the same. Corus accepts terms of 4.3 billion takeover bid from Tata Steel. Brazilian steel group CSN decides to make counter offer.
Oct 6,06
Oct 17,06
Oct 18,06
Oct 20,06
Oct 23,06
Oct 27,06
JCB chairman Sir Anthony Bamford criticizes Corus for accepting Tatas offer. The Russian steel giant Severstal announces it will not compete. CSN group approaches Corus with an offer of 475 pence per share. Corus decides to consider CSNs offer in the best interest of the company.
Nov 3,06
Nov 18,06
Nov 27,06
Dec 18,06
Tata Steel increasing its original bid for Corus to 500 pence per share CSN makes its counter bid for 515 pence per share.
Tata Steel had agreed to offer Corus investors 608 pence per share in cash. Tata Steel manages to win the acquisition to CSN.
Jan 31,07
April 2,07
Process
Appointing Advisors
Negotiating Terms Due Diligence
Exchange of contracts
Completion
The Deal
Tata Steel (India)
Financing Acquisition
Acquisition funded through a debt-equity
Exposure of Tata Steel Rest of the funding - through long term loans taken by SPV created in UK Loan will be serviced out of Coruss cash flows Raising the equity component in the form of preferential offer by Tata Steel to Tata Sons, or through GDR or rights offer to shareholders
Leveraged Buyout
Cost of Deal
Tata proposed - A price of
Cost of Deal
USD 6.2 billion of term debt with an average life of around 5 years $ 2.27 bn of equity and convertible preference shares on a rights basis. $ 875 million in Convertible Alternate Reference Securities (CARS)
The syndication of the debt with participation by more than 25 banks and institutions Tata Steel : Annul report 2007-08
5 years convertible instrument with a coupon of 1% and a conversion premium of 35% to the prevailing market price in August 2007
Cost of Deal
Particulars Equity capital from Tata Steel Long-term debt from consortium of banks Quasi-equity funding at Tata Steel Asia Singapore Long-term capital funding at Tata Steel Asia Singapore $ $4.10 billion $6.14 billion $1.25 billion $1.41 billion
Total
$12.90 billion
8 bn Debt
http://www.tata.com/company/releases/inside.aspx?artid=SwWIS8iEnOk=
Why cash-deal?
Post-acquisition Strategies
Tata steel's Continuous Improvement ProgramASPIRE Corus's Continuous Improvement Program- The Corus Way
Tata Steel > Managing Director- B Muthuraman > Deputy Managing Director (steel) -T Mukherjee > Chief Financial Officer -Kaushik Chatterjee
The Corus group > CEO -Phillipe Varin > Executive director (finance)- David Lloyd > Division director (strip products)Rauke Henstra
Cost of steel
Increase in profitabili ty
Backward integration for Corus & Forward integration for Tata Steel
EBITDA
Debt raised Debt equity ratio
Conclusion
References References
Tata Steel: Annual Report 2006-07 Tata Steel: Annual Report 2007-08 http://www.tata.com/ http://www.tatasteel.com/ http://articles.timesofindia.indiatimes.com/2007-04-11/indiabusiness/27876944_1_tata-steel-uk-corus-shareholdersbridge-loans