November 23, 2016 | 507 words | 2-minute read
Statements by Tata Steel with reference to media reports regarding Tata Steel's acquisition of Corus in 2007.
Nov 23, 2016: Tata Steel strongly dismisses Cyrus P Mistry's allegations
“With reference to media reports on Tata Steel’s Corus acquisition, the company strongly dismisses the unsubstantiated allegations being made against the company, its erstwhile board and management. The acquisition of Corus Group Plc was based on the long term strategy of the Company to pursue growth through international expansion and enhance the portfolio of value added products. The performance of Corus Plc post acquisition validated the strategy till the black swan event of the global financial crisis structurally impacted the underlying demand conditions in Europe causing financial hardship to the entire industry. The entire acquisition was undertaken by following due Board governance process under the supervision and oversight of the Board of the Company. The acquisition proposal was extensively deliberated in the Board and the Board approved the transaction. As a responsible listed company, Tata Steel also made appropriate disclosures at various stages of the transaction to the regulators during years 2006 and 2007. These disclosures are available on the websites of the stock exchanges".
Nov 23, 2016: 'Surprised and sad' at frivolous comments, says B Muthuraman, former vice chairman and MD, Tata Steel
Mumbai: With reference to media reports on the Tata Steel Corus acquisition, B Muthuraman, former vice chairman and managing director, Tata Steel has issued the following statement.
“I am surprised and very sad to see the speculative and biased views being fed in the media regarding the acquisition of Corus nearly a decade back in early 2007. The long term strategy of Tata Steel was well thought out after a lot of deliberation to grow the company through capacity expansion in India and internationally through inorganic growth. The overseas growth strategy was also to focus on accessing new markets through acquisitions, enhance the technology capability of the company and develop high end premium products. Following the successful acquisition of NatSteel in Singapore and Millennium Steel in Thailand, Corus Group plc provided a natural fit for the portfolio especially since the Netherlands facilities which is the gold standard in competitive positioning were part of the asset perimeter. The board of Tata Steel was deeply involved in all the deliberations and had approved the transaction. The value of Corus increased since the initial bid in line with the commodity price boom, its underlying performance and the transaction process. The acquisition was through a transparent auction process managed by the Takeover regulator in the UK and the acquisition price was 50 million pounds higher than the next bidder. In the first two years of the acquisition itself, Corus had an average annual EBIDTA of over 1 billion pounds which justified the reasonableness of the acquisition. The sudden and unprecedented scale of the global financial crisis in 2008 had a very significant adverse impact on the industry fundamentals in Europe which also impacted the performance of Corus. Therefore, such frivolous and unconsidered comments on the acquisition should be avoided”.