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Tata
Steel board approves Corus acquisition
October 20, 2006
The Manager - Listing
National Stock Exchange of India Ltd.
Exchange Plaza
Bandra-Kurla Complex, Bandra (E)
Mumbai 400 051
The Secretary
Bombay Stock exchange Ltd.
Dalal Street, Fort
Mumbai 400 001
Dear Sirs
1.
This is to inform you that the board of directors of
Tata Steel at its meeting held on October 20, 2006,
has approved the acquisition of the entire issued share
capital of Corus Group plc ("Corus") ("Acquisition"),
at a price of 455 pence in cash for each share valuing
Corus at GBP 4.3 billion.
2. Corus is Europe's second largest
steel producer with revenues in 2005 of GBP 9.2 billion,
and crude steel production of 18.2 million tons primarily
in the UK and Netherlands. Corus is primarily engaged
in the manufacture of semi-finished and finished carbon
steel products. Its activities are divided into three
main divisions: strip products (including coated and
uncoated strip and welded tubes, sold both as coil and
sheet), long products (including sections, plates, wire
rod, narrow strip and engineering steels) and the distribution
and building systems division, which operates as a link
between Corus's manufacturing operation and its customers.
It has a global network of sales offices and service
centres.
3. The acquisition is proposed
to be made by Tata Steel UK, a wholly owned indirect
subsidiary of Tata Steel, recently incorporated in the
United Kingdom for the purpose of completing the acquisition.
The said acquisition is proposed to be effected by means
of a scheme of arrangement under Section 425 of the
(English) Companies Act 1985, subject to High Court
of Justice in England and Wales and Corus' shareholders
approvals being obtained.
4. The acquisition is proposed
to be funded through its own cash resources and loans
raised by Tata Steel and its subsidiary companies formed
for the purpose of this acquisition.
5. The acquisition of Corus by
Tata Steel is consistent with Tata Steel's stated objective
of growth and globalisation. Growth at Tata Steel has
been focused towards new, higher end-markets and a more
sophisticated customer base. Tata Steel has identified
a number of specific benefits that it sees from a combination
with Corus. Enhanced scale will position the combined
group as the fifth largest steel company in the world
by production, with a meaningful presence in both Europe
and Asia. The powerful combination of low cost upstream
production in India with the high-end downstream processing
facilities of Corus will improve the competitiveness
of the European operations of Corus significantly. The
combination will also allow cross-fertilisation of research
and development capabilities in the automotive, packaging
and construction sectors and there will be a transfer,
from Europe to India, of technology, best practices
and expertise of senior Corus management. In addition,
Tata Steel will retain access to low cost raw materials
and slab for the enlarged group, and exposure to high
growth in emerging markets, whilst gaining price stability
in developed markets.
6. Tata Steel also believes that
between the two companies there exists a high degree
of cultural compatibility which would facilitate an
effective integration of the businesses over time.
7. Tata Steel expects to
lead the enlarged group with a combined management team.
Manufacturing will be organised so as to produce slabs
/ primary steel in low-cost facilities and produce high-end
products in proximity to client base - in both Europe
and India.
8. This announcement is not intended to and does not
constitute, or form part of, any offer or invitation
to purchase any securities or the solicitation of any
vote or approval in any jurisdiction.
Submitted for your information.
Yours faithfully,
Tata Steel Limited
J C Bham
Company Secretary
Copy to -
The Secretary
Calcutta Stock Exchange Assn. Ltd.
7, Lyons Range, Kolkata 700 001
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