Tata_corus Saga Final

8/8/2019 Tata_corus Saga Final

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REPORT ON MERGER AND ACQUISITION

OF

TATA-CORUS

Submitted to: - Submitted by:-

Mrs.Roopa Rao Kshitiz PandyaDarsheel ShahVishal JainAnkita ChauhanMaitri Shah


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Contents1. INTRODUCTION.3

1.1 Global scenario3

1.2 Recent Scenario of Global Production..3

2. Region wise Production of Global Stainless Steel - RecentTrend......3

2.1 Demand Trend......3

3. Global Prices of Steel.4

4. About Corus.6

5. Tata Corus acquisition..7

5.1 The involved companies ....7

5.2 Synergies between the two companies7

5.3 Counter bid by CSN...8

5.4 Proposed funding of the deal.8

5.5 The deal........85.6 Timelines8

5.7 Final seal structure..9

5.8 New Board formulation..9

5.9 Strategic and Integration Committee9

6. MERGERS BY TATA GROUP..10

7. Tata-Corus among top 5 deals13

8. Tatas bet big on Corus, expansion..14

9. Corus buy will impact Chinese steel market.....15

10. 'Corus: A landmark win for India'.1511. Govt ready to help Tatas complete Corus deal: FM..15

12. 'Tata deal reflects India's economic strength'..15

13. Tata buys 21.1% Corus stake for $2.4 bn..16

14. Tata-Corus: Integration to ensure $350-mn savings in 3 yrs.16

15. Tata Steel shares bounce back17

16. Meet the man who handled Tatas' Corus17

bid17

17. Tata Steel ups stake in Corus to 21.9%........................................18

18. London Court approves Tata-Corus deal...18

19. Tatas to go in for Rs 3,500 cr rights issue forCorus.19

20. SBI gives Tata $1 bn for Corus buy.20

21. Tatas' Corus takeover 'steels' the thunder in 200720

22. Tata Steel after Corus Acquisition.21

M & A IN STEEL INDUSTRIES


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23. Merger of Arcelor And Mittal...24

24.Merger of Dofasco with Arcelor Mittal38

25.Merger of Arcelor Mittal with INTL Steel42

26.Merger of NKK Corp And Kawasaki Steel..43

27.Merger of Krupp AG with Thyssen..50

28.Merger of Ispat International And Lnm Holding63

29. Merger of Essar Steel with Shree Precoated Steels..66

30. BIBLIOGRAPHY69

Introduction



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Stainless Steel is a value-added product that does not deteriorate during the lifetime of itsuse. Stainless Steel made its entry into the world of alloys less than a hundred year ago.

Global Scenario

Historically, the first use of stainless steel was made in 1913 in making cutlery items.Since then it found application Global Production of Stainless Steel. Global production ofstainless steel in 1913, in the year when it was invented, was only a few tones. In 1963,after 50 years, the world production reached 2.5 Mt. the global production of stainlesssteel crossed the 10 Mt mark in 1986.

Recent Scenario of Global Production

The International Stainless Steel Forum (ISSF) has announced that the world productionof crude stainless steel declined by about 1 percent to 24.32 Mt. The strong decrease in

stainless steel production in the third and fourth quarters of the year 2005 , has resulted inthe first decline since 2001 when the global production recorded a negative growth of 0.6percent. According to ISSF, the cut in production in the second half of 2005 was theresult of a dramatic reduction in demand. Asia was the largest stainless steel producingareas in the world, in 2003, 2004 and 2005 with shares in global production at 46.6percent, 48.4 percent and 51.4 percent respectively.

Region wise Production of Global Stainless Steel - Recent Trends

Asia was the largest stainless steel producing region in. The production was driven byChina, whose output rose to 3.2 Mt, recording a growth of 34 percent.

Demand Trend

Demand for stainless steel in the Central and Eastern European region showed strongincrease. However, local production facilities were not capable to meet this demand. Theglobal stainless steel market has been hit by an extreme lack of demand. The decreasecontinued into the early part of 2006. Market demand has started to grow in April, 2006in Europe and China.

Global Prices of Stainless Steel



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Stainless steel prices in the global market have shot up sharply between January, 2006and early May, 2006 due to the surging input prices coupled with strong demand,especially in China. For example, prices of stainless steel grade 304 which were hoveringat US $ 2,100 per tone in January, 2006 have reached US $ 3,000 per tone level in the

global market in early May, 2006. The global stainless steel industry has been grapplingwith nickel prices on the L.M.E. surging from US $ 13, 5000 per tone in January, 2006 toUS $ 18,545 at the end April 2006. Stainless Steel scrap prices reached US $ 300 perTone a gain of 10-15 percent since the beginning of 2006.

Backed by 100 glorious years of experience in steel making, Tata Steel is the worlds 6thlargest steel company with an existing annual crude steel production capacity of 30Million Tones Per Annum (MTPA). Established in 1907, it is the first integrated steel plant in Asia and is now the world`s second most geographically diversified steelproducer and a Fortune 500 Company. Tata Steel has a balanced global presence in over50 developed European and fast growing Asian markets, with manufacturing units in 26

countries.

It was the vision of the founder; Jamsetji Nusserwanji Tata., that on 27th February, 1908,the first stake was driven into the soil of Sakchi. His vision helped Tata Steel overcomeseveral periods of adversity and strive to improve against all odds.

Tata Steel`s Jamshedpur (India) Works has a crude steel production capacity of 6.8MTPA which is slated to increase to 10 MTPA by 2010. The Company also had proposedthree Greenfield steel projects in the states of Jharkhand, Orissa and Chhattisgarh in Indiawith additional capacity of 23 MTPA and a Greenfield project in Vietnam.

Through investments in Corus, Millennium Steel (renamed Tata Steel Thailand) andNatSteel Holdings, Singapore, Tata Steel had created a manufacturing and marketingnetwork in Europe, South East Asia and the pacific-rim countries. Corus, whichmanufactured over 20 MTPA of steel in 2008, has operations in the UK, the Netherlands,Germany, France, Norway and Belgium.

Tata Steel Thailand is the largest producer of long steel products in Thailand, with amanufacturing capacity of 1.7 MTPA. Tata Steel has proposed a 0.5 MTPA mini blastfurnace project in Thailand. NatSteel Holdings produces about 2 MTPA of steel productsacross its regional operations in seven countries.

Tata Steel, through its joint venture with Tata BlueScope Steel Limited, had also enteredthe steel building and construction applications market.

The iron ore mines and collieries in India give the Company a distinct advantage in rawmaterial sourcing. Tata Steel is also striving towards raw materials security through jointventures in Thailand, Australia, Mozambique, Ivory Coast (West Africa) and Oman. TataSteel has signed an agreement with Steel Authority of India Limited to establish a 50:50



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joint venture company for coal mining in India. Also, Tata Steel had bought 19.9% stakein New Millennium Capital Corporation, Canada for iron ore mining.

Exploration of opportunities in titanium dioxide business in Tamil Nadu, Ferro-chromeplant in South Africa and setting up of a deep-sea port in coastal Orissa are integral to the

Growth and Globalization objective of Tata Steel.

Tata Steels vision is to be the global steel industry benchmark for Value Creation andCorporate Citizenship.

Tata Steel India was the first integrated steel company in the world, outside Japan, to beawarded the Deming Application Prize 2008 for excellence in Total QualityManagement.



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The London-based Corus Group is one of the world's largest producers of steel andaluminum. Corus was formed from the merger of Koninklijke Hoogovens N.V. with

British Steel Plc on 6 October 1999. It employs 47,300 people worldwide and 24,000

people in the United Kingdom. It has major integrated steel plants at Port Talbot, South

Wales; Scunthorpe, North Lincolnshire; Teesside, Cleveland (all in the United Kingdom)

and Ijmuiden in theNetherlands. It also has rolling mills situated at Shotton,North Wales

(which manufactures Colorcoat products), Trostre in Llanelli, Llanwern in Newport,

South Wales, Rotherham and Stocksbridge, South Yorkshire, England, Motherwell,

North Lanarkshire, Scotland,Hayange, France, and Bergen,Norway. Group turnover for

the year to 31 December2005 was 10.142 billion. Profits were 580 million before taxand 451 million after tax. It was listed on the London Stock Exchange, Euro next

Amsterdam and the New York Stock Exchange.

Corus has four divisions: strip products division, long products division, distribution and

building systems division, and aluminum division. Corus has an annual turnover of $18

billion.

On October 5 2006, Tata Steel announced that it was looking at various acquisition

opportunities, including Corus Group. The announcement was followed by another on

October 17, 2006 stating that Tata was is in discussions with the Board and Management

of Corus Group and that it has made an indicative non-binding offer to acquire 100 per

cent equity in Corus Group at 455 pence per share. The Corus shares have raised in

recent months on speculation the Anglo-Dutch group could face a takeover following the

recent creation of Arcelor Mittal.

Tata Steel produced more than five million tones in the year ending March 2006 and aims

to reach 7.5 million tones by 2008. It had $3.8 billion in annual turnover.

Tata Corus acquisition

http://en.wikipedia.org/wiki/Corus_Grouphttp://en.wikipedia.org/wiki/Port_Talbothttp://en.wikipedia.org/wiki/Waleshttp://en.wikipedia.org/wiki/Waleshttp://en.wikipedia.org/wiki/Scunthorpehttp://en.wikipedia.org/wiki/North_Lincolnshirehttp://en.wikipedia.org/wiki/Teessidehttp://en.wikipedia.org/wiki/Cleveland,_Englandhttp://en.wikipedia.org/wiki/United_Kingdomhttp://en.wikipedia.org/wiki/IJmuidenhttp://en.wikipedia.org/wiki/Netherlandshttp://en.wikipedia.org/wiki/Shottonhttp://en.wikipedia.org/wiki/North_Waleshttp://en.wikipedia.org/wiki/Colorcoathttp://en.wikipedia.org/wiki/Llanwernhttp://en.wikipedia.org/wiki/Newporthttp://en.wikipedia.org/wiki/Rotherhamhttp://en.wikipedia.org/wiki/Stocksbridgehttp://en.wikipedia.org/wiki/South_Yorkshirehttp://en.wikipedia.org/wiki/Motherwell,_North_Lanarkshirehttp://en.wikipedia.org/wiki/Motherwell,_North_Lanarkshirehttp://en.wikipedia.org/wiki/Scotlandhttp://en.wikipedia.org/wiki/Hayangehttp://en.wikipedia.org/wiki/Francehttp://en.wikipedia.org/wiki/Bergenhttp://en.wikipedia.org/wiki/Norwayhttp://en.wikipedia.org/wiki/December_31http://en.wikipedia.org/wiki/2005http://en.wikipedia.org/wiki/Corus_Grouphttp://en.wikipedia.org/wiki/Port_Talbothttp://en.wikipedia.org/wiki/Waleshttp://en.wikipedia.org/wiki/Waleshttp://en.wikipedia.org/wiki/Scunthorpehttp://en.wikipedia.org/wiki/North_Lincolnshirehttp://en.wikipedia.org/wiki/Teessidehttp://en.wikipedia.org/wiki/Cleveland,_Englandhttp://en.wikipedia.org/wiki/United_Kingdomhttp://en.wikipedia.org/wiki/IJmuidenhttp://en.wikipedia.org/wiki/Netherlandshttp://en.wikipedia.org/wiki/Shottonhttp://en.wikipedia.org/wiki/North_Waleshttp://en.wikipedia.org/wiki/Colorcoathttp://en.wikipedia.org/wiki/Llanwernhttp://en.wikipedia.org/wiki/Newporthttp://en.wikipedia.org/wiki/Rotherhamhttp://en.wikipedia.org/wiki/Stocksbridgehttp://en.wikipedia.org/wiki/South_Yorkshirehttp://en.wikipedia.org/wiki/Motherwell,_North_Lanarkshirehttp://en.wikipedia.org/wiki/Motherwell,_North_Lanarkshirehttp://en.wikipedia.org/wiki/Scotlandhttp://en.wikipedia.org/wiki/Hayangehttp://en.wikipedia.org/wiki/Francehttp://en.wikipedia.org/wiki/Bergenhttp://en.wikipedia.org/wiki/Norwayhttp://en.wikipedia.org/wiki/December_31http://en.wikipedia.org/wiki/2005


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On 20 October 2006 the board of directors of Anglo-Dutch steelmaker Corus accepted a$7.6 billion takeover bid from Tata Steel, the Indian steel company. The followingmonths saw a lot of negotiations from both sides of the deal. Tata Steel's bid to acquireCorus Group was challenged by CSN, the Brazilian steel maker. Finally, on January 30,2007, Tata Steel purchased a 100% stake in the Corus Group at 608 pence per share in an

all cash deal, cumulatively valued at USD 12.04 Billion. The deal is the largest Indiantakeover of a foreign company and made Tata Steel the world's fifth-largest steel group.

The involved companies

Tata Steel, formerly known as TISCO (Tata Iron and Steel Company Limited), was theworld's 56th largest and India's 2nd largest steel company with an annual crude steelcapacity of 3.8 million tonnes. It is based in Jamshedpur, Jharkhand, India. It is part ofthe Tata Group of companies. Post Corus merger, Tata Steel is India's second-largest andsecond-most profitable company in private sector with consolidated revenues of Rs1,32,110 crore and net profit of over Rs 12,350 crore during the year ended March 31,

2008. The company was also recognized as the world's best steel producer by WorldSteel Dynamics in 2005. The company is listed on BSE and NSE; and employs about82,700 people (as of 2007).

Synergies between the two companies

There were a lot of apparent synergies between Tata Steel which was a low cost steelproducer in fast developing region of the world and Corus which was a high valueproduct manufacturer in the region of the world demanding value products. Some of theprominent synergies that could arise from the deal were as follows:

Tata was one of the lowest cost steel producers in the world and had selfsufficiency in raw material. Corus was fighting to keep its productions costs undercontrol and was on the look out for sources of iron ore.

Tata had a strong retail and distribution network in India and SE Asia. This wouldgive the European manufacturer an in-road into the emerging Asian markets. Tatawas a major supplier to the Indian auto industry and the demand for value addedsteel products was growing in this market. Hence there would be a powerfulcombination of high quality developed and low cost high growth markets

There would be technology transfer and cross-fertilization of R&D capabilities

between the two companies that specialized in different areas of the value chain.

There was a strong culture fit between the two organizations both of which highlyemphasized on continuous improvement and ethics. Tata steel's ContinuousImprovement Program Aspirewith the core values: Trusteeship, integrity,respect for individual, credibility and excellence. Corus's ContinuousImprovement Program The Corus Way with the core values: code of ethics,

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integrity, creating value in steel, customer focus, selective growth and respect forour people.

Counter bid by CSN

In November 2006, Brazilian steel marker Companhia Siderrgica Nacional (CSN)challenged Tata Steel's proposal for acquisition. They countered Tata Steel's offer of 455pence per share by offering 475 pence per share of Corus.

Proposed funding of the deal

Tata surprised the credit default swap segment of the derivative markets by deciding toraise $6.17bn of debt for the deal through a new subsidiary of Corus called 'Tata SteelUK', rather than by raising the debt itself. Tata's security credit rating was investment

grade, whereas the new subsidiary may not be. The higher risk associated with raisingdebt through a subsidiary with a lower credit rating prompted Fitch Ratings to downgradeits rating of the credit swap risks in the takeover to 'negative'. Fitch also stated that Corus'responsibility for the debt may lead to Corus' own unsecured debt rating beingdowngraded. This does not affect the rating of bonds issued by Corus which are secureddebt.

The deal

On January 31, 2007, following the lack of agreement on an offer, an auction process wastriggered. Following the conclusion of the auction process (at an unprecedented length of

nine rounds) conducted by the Panel in accordance with Rule 32.5 of the Code (the"Auction"), Tata Steel announced the proposed acquisition of Corus Group at 608p pershare, that being 5p more than CSN's top offer of 603p. The final valuation of Corus wasthus put at $12.04 Billion.

Timelines

On October 20, 2006, Tata Steel announced that it had agreed to pick up a 100%stake in the Anglo-Dutch steel maker Corus at 455 pence per share in an all cashdeal, cumulatively valued at GBP 4.3 billion (USD 8.04 billion).

On November 19 2006, the Brazilian steel company CSN launched a counteroffer for Corus at 475 pence per share, valuing it at $8.4 billion.

On December 11 2006, Tata preemptively upped the offer to 500 pence, whichwas within hours trumped by CSN's offer of 515 pence per share, valuing the dealat $ 9.6 Billion. The Corus board promptly recommended both the revised offersto its shareholders.

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On December 11, 2006, CSN announced a formal offer for the Company at anoffer price of 515 pence per Corus Share, valuing the deal at $ 9.6 Billion. TheCSN Acquisition would also be implemented by way of a scheme of arrangementand is subject to a pre-condition that either Corus Shareholders reject the TataScheme or the Tata Scheme is otherwise withdrawn by Corus or lapses. The

Corus board promptly recommended both the revised offers to its shareholders.

Also on December 19, 2006, UK Watchdog the Panel on Takeovers and Mergersannounced that the last date for each of Tata and CSN to announce revised offersfor the Company, should they wish to do so, is 30 January 2007. They alsowarned that it would begin an auction procedure if the two remained incompetition.

On January 31 2007 Tata Steel won their bid for Corus after offering 608 penceper share, valuing Corus at $11.3bn

Final seal structure

$3.53.8bn infusion from Tata Steel ($2bn as its equity contribution, $1.51.8bnthrough a bridge loan)

$5.6bn through a LBO ($3.05bn through senior term loan, $2.6bn through highyield loan)

New Board formulation

A new board was formulated with representation from both the companies to provide acommon platform for strategy and integration.

Mr. R.N. Tata will be the Chairman of Tata Steel and Corus. Mr. Jim Leng will be the deputy chairman of Tata Steel and Corus. Mr. B Muthuraman, Mr. Ishaat Hussain and Mr. Arun Gandhi to join the Corus

board.

Strategic and Integration Committee

A 'Strategic and Integration Committee' was formulated to develop and execute theintegration and further growth plans. Appropriate cross functional teams were formedunder this committee to look into specific issues.



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2M & A IN STEEL INDUSTRIES

MERGERS BY TATA GROUP

Corus: Europes second largest steel maker with operations in the UK andmainland Europe and over 40,000 employees worldwide. Its long and stripproducts cater to the construction, automotive, packaging, and engineering andother markets worldwide. Corus is implementing major investments at itsplants at Ijmuiden, in the Netherlands and at Scunthorpe in the UK as part ofits drive to strengthen product differentiation, improve operational efficiencyand reinforce existing competitive position, particularly in the constructionand automotive sectors, including the development of new advanced highstrength steels.

(www.corusgroup.com)

Tinplate Company of India Limited (TCIL):With a market share ofover 35%, it is the industry leader in India. It has the capability to supply alltinning line products including electrolytic tinplate / tin-free steel and cold-rolled products.

(www.tatatinplate.com)

Tayo Rolls Limited: India's leading roll manufacturer and supplier, thecompany produces rolls which find application in integrated steel plants, power plants, the paper, textile and food processing sectors, and thegovernment mint.

(www.tayo.co.in)

Tata Ryerson Limited (TRYL): TRYL Is in the business of steelprocessing and distribution. It offers hot and cold rolled flat steel products incustomized sizes and quantities through processing services and materialsmanagement services.

(www.tataryerson.com)

Tata Refractorys Limited (TRL): It produces High Alumina, Basic,Dolomite, Silica and Monolithic Refractorys and offers design, procurementand re-lining applications services. It is one of the few companies worldwideto produce silica refractories for coke ovens and the glass industry. TheCompany has a basic bricks manufacturing unit in China.

(www.tataref.com)

Tata Sponge Iron Limited (TSIL): TSIL is the first Indian sponge ironplant based on Tata Steel's Direct Reduction Technology. Its major productlines are sponge iron lumps and fines.

(www.tatasponge.com)

Tata Metallics: Amongst the top wealth creating companies (EVA+) in thecountry, Tata Metallics is engaged in the business of manufacturing andselling foundry grade pig iron.

(www.tatametaliks.com)

Tata Pigments Limited: TPL's range of products includes oxides of iron,
http://www.corusgroup.com/http://www.tatatinplate.com/http://www.tayo.co.in/http://www.tataryerson.com/http://www.tataref.com/http://www.tatasponge.com/http://www.tatametaliks.com/http://www.corusgroup.com/http://www.tatatinplate.com/http://www.tayo.co.in/http://www.tataryerson.com/http://www.tataref.com/http://www.tatasponge.com/http://www.tatametaliks.com/


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Tata-Corus among top 5 deals

The $8 billion Tata Steel-Corus deal was at No 5 among the top deals witnessed by thesteel industry.

The table is topped by the Arcelor-Mittal Steel deal of $32 billion followed by the NKKCorp-Kawasaki Steel deal of $14.1 billion.

BIG DEALS...

Target Buyer Value ($bn) Year

Arcelor Mittal Steel 32.2 2006

NKK Corp Kawasaki Steel 14.1 2001

LNM Holdings Ispat Intl 13.3 2004

Krupp AG Thyssen 8.3 1997

Corus Tata Steel 8.0 2006

Dofasco Arcelor 5.2 2005

Intl Steel Mittal Steel 4.8 2005

Tatas bet big on Corus, expansion

It's not just Corus. Tata Steel will have to brace up for one more battle back home --sourcing iron ore for its ambitious expansion plans. But a successful acquisition of theAnglo-Dutch steelmaker will not spoil the company's domestic expansion plans.On the contrary, both are complementary.Tata Steel's Greenfield projects -- in Orissa, Chhattisgarh and Jharkhand -- were

significant for Corus, which incurred high cost on raw materials, said sources close toTata Steel. The company was able to send slabs from these plants to Corus."However, this is not the only advantage that Tata Steel was bringing to Corus.Operational management and other synergies were equally significant.With Corus in sight, Tata Steel had raised its production target to 100 million tone till2015, more than three times its previous target of 30 million tone. Tata Steel nowproduces five million tone of steel at its Jamshedpur plant.

http://www.tmilltd.com/http://www.mjunction.in/http://www.trfltd.com/http://www.juscoltd.com/http://www.tatapigments.com/http://www.tmilltd.com/http://www.mjunction.in/http://www.trfltd.com/http://www.juscoltd.com/http://www.tatabluescopesteel.com/


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As of now, the company has enough iron ore to feed its plant in Jamshedpur with acapacity of 5 million tones. However, more iron ore will be required, once theJamshedpur plant goes for expansion, as well as for the Jharkhand and Orissa plants.Tata Steel's Greenfield 12 million tone Jharkhand project is gathering dust since therehabilitation and resettlement package has not been announced by the government, as

yet. Without the policy in place, the company would not be allotted land. The Orissaproject for which the company had placed orders worth of Rs 1,000 crore (Rs 10 billion)was on track. Once the company invests around 25 per cent of its project cost, it wasallotted iron ore mines.Tata Steel sources indicated that the 10 Chhattisgarh villages had passed resolutions insupport of acquisition of land. The company was eyeing a five million tone capacity plantin the state.If Tata Steel's iron ore plans are seeing some hiccups, rival suitor CSN is somewhat in thesame boat. Another Brazilian miner CVRD has challenged CSN's ability to supply cheapiron ore from Brazil to feed the Corus plants in Europe. CSN, however, dismissed theCVRD claim.

The auction had included eight rounds in which both rivals-- Tata Steel and CSN-- cansubmit fixed price cash bids. If none of them withdraws, there will be the final and lastninth round which will give chance to the offertory to outbid the other within a ceilingthat has already been informed to the panel.There has to be a difference of at least five pence for each round of the bid between thetwo suitors. It means, the Corus shareholders could get as much as 600 pence a share ifthe fight between the two suitors lasts till the ninth round. At that moment, CSN's 515pence a share offer is more than Tata Steel's bid of 500 pence a share.

Corus buy will impact Chinese steel market

At last, the deal has finalized after nine rounds of bidding for Anglo Dutch steelmaker, Corus between Indian steel producer, Tata Steel and CSN, Brazil's steel company.Winning the Corus deal makes Tata Steel the world's fifth largest steel company. Afternine rounds of bidding at 608 pence per share, Indian steel maker, Tata Steel won Corusin an all-cash deal. This deal will put combined capacities at 22 mtpa.In accordance with this, analysts from Steel Biz Briefing say that this deal will help Tatacatapult itself into the global industry.

http://www.natsteel.com.sg/http://www.tatasteelthailand.com/http://www.dhamraport.com/http://www.natsteel.com.sg/http://www.tatasteelthailand.com/


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The Tata-Corus Saga

They also say that the Chinese steel industry will continue to grow, and that China, notbeing a low cost producer, will not flood market with cheap steel. They believed thatsteel prices would become positive in 2007.

'Corus: A landmark wins for India'

After a much-deliberated wait, Tata Steel had finally won Corus. At the end of ninerounds of bidding at 608 pence per share, Tata was one-up on Brazilian playerCSN. Arun Gandhi the director of Tata Sons was a key player in clinching the deal.He is one of India's leading chartered accountants and has managed to maintain a lowprofile for almost four decades. An expert in auditing, taxation and due diligence, Gandhi

is better known for his valuation and negotiation skills, making him the best bet that theTata Group could have against CSN. Industry experts reveal that he is India's masternegotiator because of his ability to structure complicated deals in the most cost-effectivemanner.

Govt ready to help Tata's complete Corus deal: FM

Terming Tatas' successful bid for acquiring Anglo-Dutch steel company Corus as an eg.Of aggressive Indian businesses, Finance Minister P Chidambaram said on Wednesdaythe government would be ready to help the industrial house to complete the deal.

"Government will be ready to help Tatas if they have any request to complete thetransactions, the finance minister told to reporters, New Delhi.

'Tata deal reflects India's economic strength'

Commerce and Industry Minister Kamal Nath on Wednesday said the Tata'sacquisition of Corus was a sign of India's economic strength."The Tata's win reflectsIndia's economic and fundamental strength," the minister said. Nath had earlier said thatthe corporate deals should always be determined by business forces taking into accountthe best corporate practices. He stated that the governments should not have much role inthese business deals. Kamal Nath said Tata's acquisition of Corus depicts India becoming

a major foreign investor, besides remaining an attractive FDI destination. He saidconsolidation in the industry was an important step in global competitiveness. Nathhandles Commerce and Industry Departments dealing with the policy issues governingboth international trade and investments.

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Tata buys 21.1% Corus stake for $2.4 bn

Within a day of its victory in the auction to acquire Corus Group Plc, corporategiant Tata Steel had acquired 21.1 per cent stake in the Anglo-Dutch steelmaker forabout $2.4 billion at 608 pence a share. Tata Steel said it had acquired 199,955,952 (199million) shares at its final offer price of 608 pence a share. The shares were purchased onWednesday by its wholly-owned subsidiary Tata Steel UK Ltd; the acquisition vehiclefor the Corus deal, Tata Steel informed the Bombay Stock Exchange. After winning thenine-round auction for Corus on Wednesday, the company had said it intended to acquireshares from the market at a price of up to 608 pence in cash. It had asked all Corusshareholders wishing to sell their shares to Tata Steel to contact its corporate brokers atABN Amro Hoare Govett and Deutsche Bank.

Tata-Corus: Integration to ensure $350-mn savings in 3 yrs

Tata Steels Managing Director B Muthuraman said that the integration of operations ofCorus with Tata Steel would result in cost savings of $350 million per year in three years.This would accrue from synergies in procurement of raw materials and lower marketingexpenses.With a turnover of $24.4 billion, the two companies had a combined output of 23.5million tones per annum. This global scale -- the combined entity will be the fifth largestplayer in the world -- will bring in further economies.Muthuraman said Tata Steel would now have access to mature European markets, thusincreasing its geographical reach. On the other hand, Corus will have access to a low-costslab manufacturer, which would help it tremendously as it is focused on the globalmerchant slab market.Corus's high value-added product mix, including tin plate and specialized galvanizedsteel, especially for the automotive and construction sectors, will open up newopportunities for Tata Steel.Besides, Corus has a highly capable research and development team, which again couldbe of great use to the Indian company.Since some of Corus's plants suffer from high slab cost production (estimated at around$330-$340 per tone), the company needs to be supplied with slabs at a competitive price.Muthuraman justified the acquisition saying that the cost of a Greenfield entity would bein the region of $1200-1300 per tone while the enterprise value per tone paid for Coruswas $700-$710 per tone.Tata Steel was a far more efficient steel producer with an operating profit margin of over30 per cent, compared with a margin of 10 per cent for Corus. According to Muthuraman,the integration of operations will improve Corus's efficiency and profitability.Meanwhile, Corus had ruled out any job cuts at its UK operations following its successfulacquisition by Tata Steel. Media reports quoted Corus Plc Chief Executive Philippe Varinas saying that the company had no intentions to shed jobs at its main sites in Port Talbot,Scunthorpe and Rotterdam and added the deal was the best thing for employees.



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Tata Steel shares bounce back

Tata Steel's shares, which were battered by investors after the company acquired Corusfor 6.7 billion pounds, returned to the positive zone across the board on re-emergence ofbuying interest at prevailing low level.

The company's shares after opening on a strong footing at Rs 465, climbed to hit thesession's high of Rs 472.05 before winding up Rs 6.95, or 1.48 per cent higher at Rs469.90 on the BSE.

Over 55 lakh shares had changed hands on the BSE and NSE. Stocks which were rulingat Rs 520 before the Corus acquisition, had dipped to Rs 420 but regained strengthfollowing revival of buying at attractive low levels then.

Meet the man who handled Tatas' Corus bid

Tata group chairman Ratan Tata did not sleep a wink on the fateful night of January 31.He and his trusted lieutenants, camped in a suite at Taj Mahal Hotel in Mumbai, wereconstantly keeping touch with his team at London where the Anglo-Dutch steel companyCorus Group was being sold through an auction.In the wee hours, he received a call from his London team. Tata Steel purchased Corus.The rest is history.Meet Arunkumar Ramanlal Gandhi. The head of the M&A activities in the Tata Group,who called up Tata to convey Tata Steel's victory.While Tata along with the group's other honchos like Noshir Soonawala (vice-chairman,Tata Sons), B Muthuraman (managing director, Tata Steel) and Koushik Chatterjee (VP,finance, Tata Steel) were biting their nails with tension, Gandhi was representing theTatas at the auction process.Gandhi has been responsible for many acquisitions of the group, which has been thelargest acquirer of foreign companies in the country over the past three-and-a-half years.Consider the long list: Tyco, Teleglobe, Brune Mond, INCAD, Eight O' Clock, GoodEarth, Glaceau, Imacid and Corus. But Corus is the most satisfying of the lot, he admits.Each acquisition had its own challenges but Corus was different on many counts. Apartfrom the sheer size of the deal, this was the first listed company taken over by the group,outbidding a strong contender.Gandhi, 63, joined the group's holding company Tata Sons only three-and-a-half yearsago. Prior to joining Tata Sons, he was a senior partner at N M Raiji & Company untilJuly 2003. The firm has more than 60 years of professional standing.He joined the firm as a partner in July 1969 and was elevated to the position of seniorpartner in 1993. There, he handled a variety of client engagements, including advisoryservices relating to mergers and acquisitions.



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After the successful acquisition of Corus, Gandhi sets a simple target for himself: hewants to buy many more such companies. And bankers who know him and the TataGroup say they have the capability to do so.

Tata Steel ups stake in Corus to 21.9%

Tata Steel on Thursday said its UK subsidiary has picked up over 71.36 lakh (7.136million) equity shares of London-based Corus Group Plc at 601.75 pence, less than thefinal bid price offered by the company for acquiring the Anglo-Dutch major.Tata Steel, UK, the acquisition vehicle for the Corus deal, had purchased the sharesrepresenting 0.8 per cent stake in Corus for an aggregate of 42.94 million ($84.38million), the company informed the Bombay Stock Exchange. The company had said ithad acquired a 21.1 per cent stake in the Anglo-Dutch steelmaker for about 1.21 billion($2.4 billion) at its final offer price of 608 pence a share.With the above purchase, Tata Steel UK holds 21.9 per cent (207 million equity shares)stake in Corus Group Plc, the filing said. After winning the nine-round auction for Corus,

the company had said it intends to acquire shares in Corus in the market at a price of upto 608 pence in cash. It had asked all the Corus Shareholders wishing to sell their sharesto Tata Steel to contact the designated corporate brokers at ABN Amro Hoare Govett andDeutsche Bank.

London Court approves Tata-Corus deal

The High Court in Britain had approved the $12 billion take over of Anglo- Dutch steelmaker Corus Group by the Indian steel giant Tata Steel. The deal was expected to becompleted by early next week.

The High Court of Justice in England and Wales on Tuesday sanctioned the scheme ofarrangement related to Corus' acquisition by Tata Steel at a price of 608 pence a share,the London Stock Exchange listed firm said in a regulatory filing.

The court verdict follows approval of the deal by shareholders of Corus Group with agreat majority of over 96 per cent on March 7.

Corus said that trading in its shares at LSE and Amsterdam Stock Exchange and inAmerican Depositary Shares at New York Stock Exchange was expected to be suspendedon March 29 while another court hearing was scheduled for March 30 to confirm thereduction in the company's equity capital.

Tata Steel had said on February 7 that it plans to dispatch the consideration pursuant tothe scheme as soon as possible on or after April 2.

Tatas to go in for Rs 3,500 cr rights issue for Corus

Tata Steel is likely to launch a rights issue of nearly Rs 3,500 crore to part-finance its$12.15 billion acquisition of Anglo-Dutch steelmaker Corus Group, payment for which is



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to be made tomorrow. The issue may be priced at around Rs 400 a share, against today'sclose of Rs 495.55 on the Bombay Stock Exchange.Sources close to the situation said the Tata Steel board was slated to discuss the issue atits meeting on April 17. The proportion of the issue how many rights shares to begiven against existing sharescould not be ascertained.

The Tata Steel stock had risen 16.84 per cent in the past one week, anticipating such amove from the company. The BSE Sensex had risen 4.5 per cent in the period. In the pastone month, the stock has gone up by 14.23 per cent, against the Sensex's rise of 2.2 percent. Sources said the Tata Group had preferred a rights offer over an overseas float as itmight help the promoters scale up their stake by picking up the unsubscribed portion ofthe offer. At least, it will not end up with a reduction in the promoters' stake, whichwould have been the case had the company opted for an overseas listing. The promotershold a 30 per cent stake in the company.The company told the stock exchanges today that the board would consider raising equityfunds as part of its long-term fund-raising exercise to finance Tata Steel's investment inthe special purpose vehicle for acquiring Corus Group Plc UK.

Tata Steel had already bought a 21 per cent stake in Corus through open markettransactions. Sources said Tata Steel UK, Tata Steel's wholly-owned subsidiary throughwhich the acquisition was routed, would raise nearly $9 billion through a mix of seniorbank debts and high yield debts. Termed as leveraged buyout, this debt was serviced fromthe future cash flow of Corus. Tata Steel and Tata Sons have committed to bring in $4.1billion as their contribution towards the special purpose vehicle Tata Steel UK. Of this,nearly $1.3 billion will be funded from Tata Steel's cash reserves. Also, Tata Sons willprovide funds through conversion of warrants. The remainder would be raised throughdebts.Tata Steel, at the annual general meeting in July 2006, had passed an enabling resolutionto raise Rs 6,500 crore. As part of the fund rising, promoters had infused Rs 1,393 crorethrough subscription of preferential shares. They had also subscribed to 28.5 millionwarrants, which are due for conversion into equity shares after April 1, 2007.Thecompletion of the Corus deal is pursuant to the scheme of arrangement being declaredeffective by the High Court of Justice in England and Wales on April 2 2007. Tata Steelwas required to dispatch the consideration not more than 14 days after the effective datei.e., by April 16.This was the third rights issue by Tata Steel in the last 22 years. The company issued 1:3rights offer in 1988 and 2:5 offer in 1993

SBI gives Tata $1 bn for Corus buy

The State Bank of India (SBI), the country's largest lender, has come to Tata Steel's aidfor completing the fund-raising for its $12.9 billion acquisition of Anglo-Dutchsteelmaker Corus.The bank has agreed to provide up to $1 billion to Tata Steel's special purpose vehicle,Tata Steel UK, to refinance $7.2 billion of bridge loans taken for the biggest buyout by anIndian company. SBI official approved a loan of $800 million to $1 billion to Tata Steel.A Tata Steel spokesperson confirmed that the company was availing of the loan from the



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SBI.Tata Steel had to turn to the SBI after some foreign banks backed out, thanks to thesub-prime crisis in the US and the credit squeeze that followed.According to reports, about $500 billion of fund-raising had been caught in a globalcredit logjam caused by risk aversion among banks and other investors. This was also thefirst acquisition financing of this size provided by the SBI, which till now was involved

in deals of less than $100 million (Rs 410 crore).Earlier, Tata Steel had to agree to pay 50basis points more on a $1-billion, seven-year loan as the banks participating in the loansyndication bargained with the underwriters for higher yield. The loan's underwriterswere ABN Amro, Citigroup and Standard Chartered.There had been as much as 200 basis point increase in credit spreads on Indian loan andbond issues in the month of July, when the sub-prime crisis first struck internationalcredit markets.

Tatas' Corus takeover 'steels' the thunder in 2007

.Tata Steel's $12-billion takeover of Britain's largest steel maker Corus Group Plc in early

2007 not only catapulted the Indian conglomerate to the global corporate centre-stage,but also gave other domestic companies the self-belief of taking on multinationals muchbigger.

Not surprisingly, several compatriots such as Essar and JSW Steel bought companiesoverseas while a few others initiated steps to acquire coal or iron ore mines abroad toensure steady supply of raw materials for expanding output.

Back home, world's largest steel firm ArcelorMittal and South Korea's Posco struggled tostart work on their three massive projects in Orissa and Jharkhand that are togetherestimated to cost more than $35 billion.

The year also saw heated debate within the industry and the government on the criticalissue of iron ore exports. The government in its Budget imposed a tax on ore exports, butlater scaled it down after much hue and cry. Meanwhile, UK-based metals firm VedantaResources acquired the country's top private iron ore exporter Sesa Goa to diversify itsportfolio that already included aluminium, copper and zinc.

Besides, the government raised the production target of country's steel making capacity to124 million tons by 2011-12 from 56 million tons at present. In line with this goal, statefirm SAIL announced an investment of Rs 53,000 crore (Rs 530 billion) to hikeproduction capacity to 26 million tons for maintaining its leadership position in thecountry.The steel sector, in fact the entire Indian industry, could not have asked for a better startto 2007 with Tata Steel outbidding Brazil's CSN in January to acquire Corus Group tobecome the world's sixth-largest steel maker in a deal that was the biggest by an Indiancompany.

But Tatas were not satiated with the Corus deal only. Tata Steel inked an initial pact withVietnam Steel Corp for building a 4.5 million tonne plant in the South-east Asian nation.



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It then notched a deal to extract coal from a block in Mozambique with Australia-listedRiversdale.

Ruias-led Essar also took the west by surprise by buying Canada's Algoma Steel for 1.58billion dollars and US-based Minnesota steel plant for an undisclosed price. Similarly,

Sajjan Jindal-led JSW Steel agreed to buy Argent Independent Steel, a service centre inthe UK. It is also in talks with a local player in Mozambique to conduct due diligence ona site that could be later mined for coal.Steel Authority of India Ltd, Rashtriya Ispat Nigam Ltd, NTPC, Coal India and NMDCformed a joint venture to acquire properties abroad. The new entity is looking to acquirerights for coal mining in Africa, especially Mozambique.

Reports of possible dilution of stake in SAIL and RINL raised eyebrows in the industryas also in the government during the year, but the Steel Ministry denied any such move.

Meanwhile, arch rivals India and China decided to join hands in extending cooperation iniron and steel sector.

Tata Steel after Corus Acquisition

Tata Steel has acquired the 5th largest steel producer of the world, Corus, scoring overBrazil's CSN at $12.15 billion (around Rs 55,000 crore) in cash, making it the largestacquisition by an Indian company and the second largest in the industry after MittalSteel's $38.3 billion acquisition of Arcelor.Tata's bid of 608p per share, which beat a price from CSN of603p, was 33.6 per centhigher than its original bid. By some measures, it exceeded the price paid in other recent

industry deals, such as Mittal Steel's acquisition of Arcelor last year. In its centenary yearof 2007, Tata Steel, a subsidiary of Tata Group, India's largest private sector company,was aiming to touch the production figure of 7 million tones but the acquisition wouldbring the total capacity of the group to around 23 million tones, making it the fifth largeststeel producer in the world. The group was in look out for big overseas acquisitions as theIndian steel producers have limited-to-no options to jeopardize their bright future byoffering its stake to competitors, it would be nothing short of firing at ones own toe,especially when the economy is booming and the potential for steel producers isoverwhelming. At 8 per cent of GDP growth, Indian steel producers are expecting abright future ahead and hence leaves little chance for mergers and acquisitions betweentwo giants from within the country. For 2015, the production target is set at 30 million

tones. Tata Steel produced about 5 million tones of steel the last financial year endingMarch 2006. Sensing the need, Tata Steel started scouting for overseas presence throughGreenfield or Brownfield projects early this\ century. The company's global journeybegan with the announcement of its Greenfield Ferro chrome plant in South Africa in2003. At Richards Bay as the possible location, the major aim of this plant was to procureraw material for its India-based stainless steel plant. The plant is set to be completed intwo phases, first of which is to begin commercial production by early 2008. The firstphase of the Ferro chrome plant in South Africa would have a capacity of 0.12 million



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tones with an investment of Rs 3000 million. The company has decided to set up twofurnaces with a capacity of 60,000 tones. Looking at the success of L N Mittal throughmergers and acquisitions, Tata Steel recently announced its interest in overseasacquisition especially in Europe and USA. Timely remark by Corus' officials expressingtheir interest in China, Brazil and India for cheaper steel induced Tata Steel to cash in on

the opportunity and decided to offer a bid for Corus. As Corus was also seen interested insetting up a modern steel distribution network in India, Tata Steel wanted to leave nostone unturned to mark its European presence. Tata Steel is planning a 50-50 balance between greenfield facilities and acquisitions for future growth. To possess the 100-million tonne capacity by 2015, the company is looking at adding another 29 milliontonne through the acquisition route. TataSteel's acquisitions all of them overseas add up to 21.4 million tonne, with Corusaccounting for 18.2 million tonne, Natsteel two million tonne and Millennium Steel 1.2million tonne. The company would focus on its greenfield projects now. The companyhas lined up a series of greenfield projects in the country and outside. The projects willadd 6 million tonne in Orissa, 12 million tone in Jharkhand and 5 million tonne in

Chhattisgarh. In the international market, the company recently received approval forsetting up 3 million tonne plant in Iran and there are plans to set up 2.4 million tonnecapacity plant in Bangladesh, which has hit a roadblock. This is besides the expansions atthe existing plant in Jamshedpur. It will not be possible to expand at Jamshedpur beyond10 million tonne. The Corus acquisition would not affect the company's ongoingexpansion plans.



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MERGER OF ARCELOR AND MITTAL

Mittal makes $22 bn offer for Arcelor

Steel tycoon Lakshmi Mittal launched a Euro18.6 billion (over $22 billion) takeover bid

for Arcelor of France on Friday, a move that would lead to the merger of the world's two

biggest steel companies.

According to a release on the website of Mittal Steel, the offer values each Arcelor share

at Euro 28.21, which represents a 27 per cent premium over the closing price and all-time

high on Euronext Paris of Arcelor shares on 26 January 2006.

The offer values Arcelor at an equity value of Euro18.6 billion (over $22 billion) on a

fully diluted basis, the release said. Under the terms of the offer, Arcelor shareholders

will receive four Mittal Steel shares and Euro 35.25 cash for every five Arcelor shares.

Lakshmi N. Mittal, chairman and CEO of Mittal Steel, said, "The last ten years have seen

a major shift towards consolidation of the steel industry, helping to create sustainable

value for all stakeholders. Both Mittal Steel and Arcelor have been at the forefront of this

consolidation and share a similar vision for the future of our industry. This combination

accelerates this process and leaves us uniquely positioned to benefit from theopportunities created.

"We believe the offer provides a very attractive premium and has been structured so that

Arcelor shareholders have the opportunity to participate in the exciting growth potential

of the combined company, whilst also receiving a generous cash element. We wouldencourage them to consider the merits of our compelling offer and play a part in the

future of the world's only global steel company."

Mittal's nationality irrelevant: EU

Amid the raging controversy over Mittal Steel's takeover bid for rival Arcelor, the

European Union on Tuesday said it was against racial discrimination and the issue should

be treated only on commercial considerations.



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"The EU is of a clear view that nationality in such cases is not relevant and it should be

decided according to the laws in place and commercial merits," European Commission

director general (trade), David O'Sullivan said in New Delhi "It is unfortunate that

allegations of racial discrimination have crept in the issue," he added.

An expert's view on Mittal's bid for Arcelor

A 'samurai poison pill' against Mittal

However, he made it clear the EU would be concerned if there were any violations of

competition rules and the takeover created a monopoly kind of situation.

The Netherland-based Mittal Steel has made a $22.3 billion bid for Luxembourg-based

Arcelor, which would create a steel company with an output three times bigger than its

three nearest rivals combined. The bid has sparked objections from the governments of

France Luxembourg and Spain and from labour unions, who are worried about job losses

even though Mittal has assured that no worker would lose job and cited that his

operations in other countries had not resulted in retrenchment.

The issue is also likely to figure during French President Jacques Chirac's visit to India

early next month.

Arcelor rejects Mittal's new offer

Steel giant Arcelor on Monday rejected the 25 billion euros unsolicited acquisition bid byMittal Steel but agreed to meet officials of the world's largest steel maker to review its

proposal to further improve the offer.

The Arcelor board "unanimously" rejected the offer, saying it is "inadequate as it

continues to undervalue Arcelor" and recommended "shareholders support the proposed

merger with the Russian steel group Severstal and set the price per share of the self-

tender at Euro 44 - six euros more than offered by Mittal," Arcelor said in an official

statement.

Luxembourg-based steel giant decided not to commence "such self tender offer until after

the publication of Mittal Steel's offer results while mandating the group management

board to meet with Mittal Steel in order to review its proposal to further improve its offer.

Although there was no formal word from the Mittals, there were indications that NRI

steel tycoon L N Mittal might submit a revised offer. Pitching for the deal with the

Russian Steel group, the Arcelor board, which met in Luxembourg on Sunday, also asked

its shareholders to support the Severstal transactions at the general body meeting on June

30.

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Stating that Severstal transactions were more "attractive alternative from a strategic,

financial and social point of view," Arcelor took a dig at Mittal Steel, saying that "the

revisions of Mittal Steel's offer announced on May 19, 2006 demonstrate that its initial

offer undervalued Arcelor.

"Notwithstanding the increase in the consideration offered by Mittal Steel, the Arcelor

Board of Directors believes that this offer is still inadequate as it continues to undervalue

Arcelor," the statement added.

Dwelling on the reasons leading to the rejection of Mittal Steel's offer, Arcelor said its 34

per cent increase offer was required to re-align with the bid initially offered by the

company due to its under-performing share price vis--vis Arcelor's share price.

Moreover, Mittal Steel's offer does not take into proper account Arcelor's operating and

financial results for 2005, which exceeded market expectations.

The multiple by the Mittal Steel's valuation of Arcelor does not show a control premium

when compared with trading multiples of comparable companies, it said.

"The multiple by Mittal Steel's valuation remains significantly lower than multiples in the

steel sector," the statement said.

Arcelor last month said it agreed to buy most of Severstal, Russia's third-biggest

steelmaker in a Euro 13 billion ($16.4 billion) transaction, which would give Russian

tycoon Alexei Mordashov up to 38 per cent of the combined company.

Mittal's offer closes on July 5 to Arcelor's shareholders in Belgium, France Luxembourg,Spain and the United States. Arcelor said the Severstal transaction would create the

world's steel champion and the most profitable steel company.

"The Severstal transaction represents a key step in implementation of Arcelor's value plan

and growth strategy and it is consistent with its strategic vision, business model and

corporate values."

Arcelor vs Mittal: Further talks likely

Four months after NRI tycoon Laxmi Narayan Mittal made a hostile bid for

Luxembourg-based Arcelor, managements of the two steel giants have held negotiations

and will meet again soon for substantive talks despite Mittal Steel's insistence it would

not raise its euro25 billion bid offer.



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The breakthrough for the talks comes after Arcelor's supervisory board instructed its

management board to negotiate with Mittal on Tuesday.

"We have moved from a very negative involvement to a positive involvement. We hope

this kind of dialogue can lead to a satisfactory conclusion for the shareholders of Arcelor

as well as Mittal Steel," Mittal said. He had already made a compelling offer to Arcelor's

shareholders and had no plans to offer more, he said. However, advisers said there could

be some room for further unspecified improvements to corporate governance, which

could persuade Arcelor. News of an early meeting came as Mittal released details of the

company's business plan, which contains a very aggressive earnings target, 70 per cent

higher than that achieved in 2005.

Mittal expects underlying profits of $9.9 billion within two years and predicts steel prices

to rise by $30 to $60 a tonne within six months.

Reacting to the Mittal's projections, Arcelor said the outlook was unreasonably bullish.Under the same assumptions, Arcelor said its forecast for its own profits in 2009 would

rise from euro7 billion to euro8.9 billion.

"Arcelor is convinced that it is one of the most resilient global steel producers. However,

in order to deliver on its commitment to the market, it has purposely applied reasonable

and conservative assumptions in its value plan," the company said in a release on

Wednesday.

Mittal said he would make himself available for the talks if Arcelor Chairman Joseph

Kinsch and its Chief Executive Guy Dolle attended the talks.

Mittal and Dolle are yet to discuss the offer. But there are now just three weeks left

before the bid deadline.

No one can match Mittal-Arcelor union

Lakshmi N Mittal, Chairman & CEO, Mittal Steel Company, the world's largest steel

producer, said on Tuesday that the proposed Mittal-Arcelor deal is going to be a major

step towards further consolidation of the steel industry that is needed for its future.

He said that the future health of the growing steel industry depended on further

consolidation and the Arcelor-Mittal deal was the most important aspect of that."They are

complimentary to each other. They have a lot of synergies. They share the same region. I

think no other combination can match Mittal Steel and Arcelor for the future of the

industry. We need more companies to consolidate," Mittal said at a steel industry

conference organised by American Metal Market and World Steel Dynamics in New



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York.Mittal, who was the highlight speaker at the annual conference, was loudly cheered

by the members of the audience as he took to the podium.

"We are not working for financial institutions, we are working for ourselves and for our

customers and shareholders," the doyen of the steel industry said amid cheers.

"If we can show them reduced volatility, show them steady and balanced growth and

supply, we do not need futures contract," Mittal said, referring to the London Metal

Exchange's bid to develop steel markets future contracts.

In response to a question Mittal said that the Mittal-Arcelor combination is going to be a

unique one in the steel industry from the points of view of the company and shareholders.

"They are really complimentary to each other, there are a lot of synergies and they share

the same vision," he said. "No other combination can match the Mittal Steel-Arcelor

combination. This is what I have been trying to convince for the last five months and I

hope that you are the jury, the 1,300 jurors sitting here who can really decide what is better for the steel industry, for your shareholders and for the future of the next

generation," he said.

"Continued consolidation is taking us toward the stability and sustainability we desire.

The steel industry is in the early stages of a renaissance that will see it move towards

creating stability and sustainability," he said. Looking at the huge outcome of the

conference which was attended by over 1300 people from the steel industry, Mittal

congratulated the sponsors. "We must surely also congratulate them for the hat-trick they

have managed to pull off, getting Guy Dolle, Alexei Mordashov and myself into the same

room on the same day!"

Mittal outlined his vision for the model of the future, saying that he was optimistic about

the outlook for the industry. He said that the challenge now was to ensure that this

industrial transformation translates into investment renaissance.

Speaking to the PTI after his highlight speech, Mittal made it clear that the talks with

Arcelor were due to last a few more days. He said he and Guy Dolle, CEO of Arcelor,

who spoke to the audience and shareholders in the same room at different times, did not

have plans to meet that day regarding the amalgamation.

"There is no meeting at all planned, however I am very optimistic about its merger in the

near future. Only the Mittal Steel-Arcelor combination would be a truly transformational

deal for the steel industry." He left it to the shareholders, saying: "You can decide what is

best for the future of the industry." "Shareholders must be at the heart of this business,"

Mittal said. "That is what my efforts are focused on achieving." Analysts agree Mittal is



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making progress, pointing to Arcelor's decision to cancel a shareholder meeting

scheduled for this week amid shareholder concern over the company's tactics.

Mittal Steel and Arcelor intensified their campaign to win over shareholders with rival

advertisements in European newspapers aimed at influencing next week's vote on

Arcelor's proposed link-up with Russia's Severstal.

Mittal Steel, meanwhile, took out full page advertisements in the French national

press, The Financial Times, The Wall Street Journaland The International Herald

Tribune, to present its case to Arcelor shareholders.

Arcelor also, to win over shareholders, in its own ad in Le Monde and other papers, said,

"Take the profitability of the Mittal Steel project, add 23 per cent and you have the

Arcelor-Severstal project."

Lakshmi Mittal of Mittal Steel and Guy Dolle of Arcelor each spoke at an industry

conference in Manhattan, with attendees buzzing about the bid and what it meant for the

future of the steel industry.

At a speech during lunch, Dolle said concentrating an industry is not "the magic path" to

higher profits. He said: "Size is not the magic driver toward value creation," and

"consolidation differs from amalgamation."

He added that "the Arcelor way" was based on value, not volume. "Mittal is very

optimistic about India vs China growth. However, there is a difference that keeps India

behind China today and that is its infrastructure and administrative differences. In China

things happen fast," said Dolle.

"Transformation will count for little if we cannot persuade shareholders that the industry

leaders can deliver the sort of sustained financial performance they desire," he said.

Mittal, Arcelor may reach merger deal

After steadfastly resisting Mittal Steel's hostile bid since January, rival Arcelor looks

closer to agreeing to the takeover, as the two sides held discussions that were described as

advanced and constructive.

"Talks are ongoing and constructive" and some parts of the offer "in principle have been

agreed," Sudhir Maheshwari, Mittal's managing director (business development and

treasury) told Bloomberg on Friday.

The two firms will continue talks on Mittal's $30 billion offer on Friday and Saturday,

amid speculations that Mittal is all set to clinch the deal, company sources said.



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Arcelor chief executive officer Guy Dolle, who had in the past tried to fend off Mittal's

hostile bid, is believed to be moving closer to Mittal as shareholders objected to a

strategy that envisaged an agreement to combine with Russia's Severstal. Arcelor's board

is scheduled to meet June 25. Mittal wants to buy Arcelor to cut raw material costs and

increase bargaining power with customers to create a steelmaker three times bigger thanany rival.

Shares of Mittal rose 30 cents to 26.29 euros in Amsterdam. Shares of Arcelor are

suspended in Paris pending clarification on its talks with Mittal and Severstal. Mittal

might increase its bid by 3 billion euros, theFinancial Times said, citing people familiar

with the deal. That would value each Arcelor share at 40.62 euros.

The Arcelor CEO, who is in New York, demanded a higher bid from Lakshmi Niwas

Mittal, thereby indicating that he may yet favour an agreement. Arcelor has valued its

accord with Severstal at 44 euros a share.

Arcelor buzz ups steel prices

As reports trickled in about global steel majors Mittal Steel and Arcelor getting ready totie a knot, domestic steel companies appear to be cheering the development as their shareprices jumped on the Bombay stock Exchange.

After opening on a subdued note and keeping in the red through the morning trade, in-line with the broader market movements, steel scraps bounced back sharply from their

lower levels by the midday trade and settled with gains of up to 7 per cent at the end ofthe trading session.

World's largest steel maker Mittal Steel said on Friday it was pleased with thedevelopments related to its takeover bid for Arcelor, while fuelling speculations that thedeal might finally close soon after a five-month bidding war.

According to a French newspaper report, Arcelor's board of directors is scheduled tomeet on June 25 and a final decision is likely to be announced after the meeting.

There are reports about Mittal Steel raising its offer for the world's second largest steel

maker Arcelor to $30.7 billion from $23 billion.

An eventual merger of Mittal Steel and Arcelor is expected to lead to further firming upin global steel prices due to consolidation in the industry.

The metal index shot up by 217.45 points to 8,292.84, with Tata Steel also a Sensexcandidate, was up by Rs 22.85 to Rs 512.25, Sterlite surged by Rs 7.56 to Rs 394.30, Sail



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by Rs 5 to Rs 79.25, Sesa Goa Rs 80.40 to Rs 1,136.85, Maharashtra Seamless Rs 12.50to Rs 317.65, JSW Steel Rs 11.80 at Rs 269.80 and Jindal Steel by Rs 10 to Rs 1,404.20.

Arcelor, Mittal decide to merge: Reports

European steelmaker Arcelor and the L N Mittal Group have decided to merge in

principle, according to reports on Sunday.

Under the agreement, the stake of the Mittal Group will reduce to 45 percent and the

merged firm will be called Arcelor Mittal. While Lakshmi N Mittal will be the co-

chairman, the majority of the board will be from Arcelor. Joseph Kinsch is said to

continue to be chairman.

Arcelor may have to pay nearly 130 million Euros as a fine to Russian Serverstal, for

breaching the contract. The deal might be inked on June 26.A meeting of the Arcelor

board is still on and more details are awaited.

Arcelor-Mittal: Some tricky issues remain

After months of wrangling and drama, the Arcelor-Mittal deal is finally done. CNBC-TV18 reports on how the new entity is likely to fare.

A stormy courtship seems to have finally ended in an alliance, and if the shareholders

endorse it on June 30, the marriage will be formalized. The new Arcelor-Mittal entity will

produce nearly 10 per cent of the world's steel. That puts Arcelor-Mittal in a very strongposition.

Arcelor accepts Mittal's bid

The two biggest steel makers will not need to undercut each other, but focus entirely on

growth and increase in margins. But that's one part of the story. This alliance might not

quite be a bed of roses. Most of the directors on the new company's board come from

Arcelor and they were not quite in favour of Mittal.

That means Mittal might face problems. The price Mittal apparently offered for his 45

per cent stake may also skew valuations that may be difficult to justify.

Mittal steals the steel show

Jason Hunter of Steel Business Briefing said, "This may be attractive to some other

financial investors, but certainly for the individuals who are looking to gain additional

long term values to their investments, this may not be quite as attractive as they were

hoping."

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The combined entity will have 61 plants in 27 countries and some 320,000 employees all

over the world. Industry observers say that shedding excess staff and integrating the two

management teams might pose a problem.

Jason Hunter adds, "The difficult thing between the two companies is going to be the

integration of the management team, both in Europe and in North America and other

regions, due to the hostilities that had been going on over the last five to six months.

Some of them have been fairly aggressive on the comments from both sides.

Shareholder approval on June 30 is likely to be a mere formality. Arcelor-Mittal will look

to enhance its value to shareholders and live together, happily ever after.

Severstal keen to outbid Mittal for Arcelor

Arcelor's former Russian suitor Severstal has said it would improve its offer to theLuxembourg-based steel giant to thwart a partnership with Mittal Steel, whose bid was

accepted by Arcelor Board on Sunday.

In a statement, Severstal said it was amazed that its representatives were not invited to

attend Sunday's meeting of Arcelor Board and declared that it is going to improve its bid

ahead of the shareholders meeting on June 30.

Severstal, which had earlier announced its merger with Arcelor, felt slighted at not being

given a chance to respond.

According to a Russian dailyIzvestia, Alexei Mordashov, who controls Severstal, has

forged an alliance with Roman Abramovich, the owner of UK-based football club

Chelsea to offer a higher price for Arcelor shares. ABN AMRO Bank has reportedly

offered the required money to the Rusian steel-maker. One of the business

dailies Vedomosti has pointed out that Mordashov's alliance with Abramovich would be

his last chance to woo Arcelor's shareholders.

Another business dailyKommersantargued that ahead of the G-8 Summit in St.

Petersburg next month, Arcelor has seriously complicated EU-Russia relationship. It

reminded that President Vladimir Putin has linked the ratification of Energy Charter,

much sought by the European Union, to transparant access to Russian companies.

Arcelor. SA Board announced last evening the acceptance of Mittal's bid, which was

improved by 10 per cent.

"We have an agreement to merge that ties us to the board of directors of Arcelor... We are

very surprised that the board did not invite us to discuss our revised offer, and did not



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give use the opportunity to respond, as we had requested," AFP said quoting statement by

Severstal.

On May 26, Severstal and Arcelor announced with great fanfare that the two companies

would merge. The Russian firm said on Sunday that, in light of the 'legal agreement' it

has with Arcelor, it was studying 'all its options.'

Mittal, Arcelor merger not to affect India venture

The euro27.5-billion merger of the world's two largest steel companies, Mittal Steel andArcelor SA, is unlikely to impact the former's plans to invest $9 billion in its firstGreenfield project in ore rich Jharkhand.

Mittal Steel signed an agreement with the Jharkhand government last October to pump in

$9 billion into a 12-million tone project -- the second largest FDI in the steel industry-- following South Korean firm Posco's $12-billion investment plan for Orissa.

Reacting to media reports that Mittal Steel and Arcelor are close to an agreement on themerger proposed by Mittal Steel Chairperson L N Mittal in January, Mittal SteelJharkhand Pvt Ltd Chief Executive Sanak Mishra said the merger would have no bearingon the Jharkhand project.

"This is a commitment made by Mittal Steel by signing a memorandum of understandingand the merger is unlikely to impact these plans in any manner. The merger is likely torestrict itself to agreements on overall business plan, shareholding patterns and board

structure, and the Jharkhand project is not on the agenda," Mishra said.

"It is a big opportunity for us in India and the latest development will not change that," headded. Though there were reports that the newly-merged entity was likely to be renamedas Arcelor Mittal, the name of the Indian arm of the company would remain unchangedas it was already incorporated as a separate company, Mishra also said.One of the conditions put by the Jharkhand government on Mittal Steel while signing theagreement was that a new company would have to be floated for the project.



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Arcelor accepts Mittal's bid

Ending months of hostility, Arcelor SA has announced acceptance of India-born L N

Mittal group's takeover bid, improved by 10 per cent to euro25.9 billion ($32.4 billion), a

move that will create the world's largest steel entity.

Announcing the decision, Arcelor Chairman Joseph Kinsch told reporters that his Board

has unanimously backed a new takeover offer from Mittal Steel. "We concluded that

Mittal Steel's was a better offer than that of Severstal," he said.

The decision preferring Mittal to Russian steel giant Severstal, with whom Arcelor had

entered into a strategic tie-up perceived as a last ditch effort to thwart Mittal's bid, was

taken after a marathon meeting of the board at the company's headquarters.

The merged entity will be called Arcelor Mittal, Bloomberg quoted Kinsch as saying.

He said the board will recommend the new offer of Mittal Steel, which will now be

placed before shareholders for approval.

Luxembourg Economy Minister Jeannot Krecke told reporters: "We are very happy with

the situation".

Bloomberg quoted Krecke as saying that Luxembourg, which holds 5.6 per cent stake in

Arcelor, will be a winner in the transaction.

While weighing Mittal's offer, which was till recently considered as unfriendly and

hostile by its acquisition target, the Arcelor board also discussed the merger with Russia-based Severstal.

Though the Arcelor management gave a thumbs-up to the offer from the Russian

company controlled by Alexei Mordashov, many shareholders opposed it.

Arcelor will now have to pay Severstal over euro130 million for breach of contract.

Mittal had launched his bid to takeover Arcelor on January 27.

The new deal values Arcelor shares at euro40.37 a share.

The company's scrip commanded euro26 on January 26, a day before Mittal came outwith his bid.

A merger of the two top steel makers will create a company with nearly a 10 per cent

share of global production, employing more than 320,000 people.



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Shareholders nod Arcelor-Mittal merger

Paving the way for a merger between Arcelor and Mittal Steel, an overwhelming majority

of shareholders of the Luxembourg-based firm on Friday voted down a merger proposal

from Russia's Severstal.

About 58 per cent of Arcelor shareholders voted against the Severstal offer. In the

process, they accepted Mittal Steel's $32.3 billion offer, which was approved by the

Board of Arcelor on June 25 after a five-month long battle.

Arcelor had recommended acceptance of share and cash from Mittal Steel valuing at

about $32.3 billion, which would create a group with 3,20,000 employees producing

about 116.0 million tonnes of steel annually, accounting for about ten per cent of the

world market.

Arcelor chairman Joseph Kinsch told shareholders that the long fight with Mittal wasworth it, saying the India-born steel tycoon L N Mittal and the markets had finally

recognized Arcelor's "true value."

The Board of Arcelor had called on shareholders to vote against Severstal, saying it

believed the Mittal deal, which it had originally described as unfriendly and hostile, was

better and set a benchmark for the steel industry.

"We have created in five months more than euro12 billion in values," Kinsch said.

"The battle was long and hard," he said. "This defense allowed us to come out with the

best solution for the group and the most value for shareholders."

Meanwhile, Severstal chairman Alexei Mordashov has said his company was examining

all its options in relation to Arcelor, which had announced a merger with the Russian

company on May 26 to ward off the bid from Mittal.

Kinsch, however, rejected suggestions that the Severstal deal was a tactic to block

Mittal's offer and force the stakes higher, claiming the board had only been able to

change its mind about Mittal after it discussed the detailed business plan early this month.



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Mittal, Arcelor spent Rs 3,000 cr over deal

Besides being a battle of nerves, Mittal-Arcelor saga also witnessed over Rs 3,000 crore(Rs 30 billion) being spent by both the companies - an amount which is larger thanmarket capitalisation of most of the Indian steelmakers.

While Arcelor spent huge money for making all out efforts to dissuade the Netherlands-

based world's largest steelmaker from the takeover bid, Mittal went full-throttle to clinch

the deal.

The two companies spent more than $650 million in form of legal, publicity and banking

fees, while there might have been ever more unquoted expenses involved in the six-

month battle.

Arcelor spent nearly Rs 1,300 crore (Rs 13 billion) to defend itself against the unsolicited

bid besides paying Rs 822 crore (Rs 8.22 billion) to Russian steel giant Severstal as a

break-up fee.

Tata Steel, SAIL and JSW Steel are the only three exceptions whose market caps are

higher than Rs 3,000 crore, sources said.

The market caps of companies like Essar Steel Ispat Industries, Jindal Stainless ,Bhushan

Steel and Usha Martin are between Rs 600-2,400 crore (Rs 6 to 24 billion), while JSW

Steel's market value stood at nearly Rs 4,450 crore (Rs 44.50 billion) at the end of today's

trading session.

Mittal Steel gains 92% of Arcelor shares

Mittal Steel owned by NRI steel tycoon L N Mittal, on Wednesday announced it hasgained 92 per cent control of Arcelor as it moves closer to completing its 25 billion euro(Rs 145,000 crore) takeover of the European rival.

Mittal, which on July 18 announced acquiring 50 per cent share in Arcelor fulfilling the

minimum requirement for takeover of the rival, today said 594.5 million shares and 19.9

million Arcelor convertible bonds had so far been tendered, representing 91.88 per cent

of the group's fully - diluted share capital.

The company announced that it would reopen its offer for Arcelor on Thursday thatwould give shareholders of the Luxembourg-based firm time until August 17 to tender

their shares into Mittal's offer.

"I am delighted at this result which is a resounding endorsement of the strategic logic and

value of the merger of Mittal Steel and Arcelor, a truly industry transforming deal," L N

Mittal said in a statement.



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"We are very excited about our future as one company and believe this strong vote of

confidence from shareholders paves the way for a speedy integration process allowing us

to realise the full benefits of working together as the undisputed world steel leader," he

said.

According to experts, ever since Mittal made the offer to Arcelor, the combined market

capitalisation of the two companies has gone up by $8 billion.

The merged entity, to be christened Arcelor-Mittal, would control 10 per cent of the

world's steel making capacity that is currently estimated at 1,000 million tonnes a year.

Mittal happy with Arcelor deal

L N Mittal has said he is 'pleasantly surprised' at how complementary the $34.3billion merger of his company Mittal Steel with its nearest rival Arcelor has proved to

be. In an interview to Financial Times, the world's fifth richest man says although he is

not the CEO of the merged entity Arcelor-Mittal, he would play a role in setting future

strategy and looking at growth opportunities.

"I have been pleasantly surprised at how complementary Mittal Steel and Arcelor have

turned out to be. I have now met a lot of top Arcelor managers -- about 35 in total -- and I

have been very impressed with nearly all of them," he said.

The NRI entrepreneur had earlier this year succeeded in merging Luxembourg-based

Arcelor with his company after a five-month battle to create an empire that employs3,20,000 people and produces more than 110 million tones of steel, nearly 10 per cent of

global steel output.

Mittal, who is president of Arcelor-Mittal, said the takeover puts the world's largest steel

company ahead of the competition by many years. "We are a new benchmark for the

industry and I'd like to see other players move forward as well through their own

consolidation efforts," he said.

As part of the merger, about 35 teams of managers from the two companies have started

working together, he said, adding the teams are under pressure to deliver results.

Asked about his role in the new entity, Mittal said as non-executive chairman he will play

a part in setting strategy, giving a vision for the company, looking at growth

opportunities, talking to employees, strategic investors and overseeing and helping the

integration.



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MERGER OF DOFASCO WITH

ARCELORMITTAL

History

Hamilton, Ontario, Canada, has been the home of Arcelor Mittal Dofasco since 1912,when C.W. Sherman founded the Dominion Steel Casting Company to manufacturecastings for Canadian railways. Later named Dominion Foundries and Steel, the companymerged with its subsidiary, Hamilton Steel Wheel Company in 1917. The name wasofficially changed to Dofasco Inc. in 1980.

The company has been a pioneer of innovative steelmaking throughout its history. In1918, Dofasco fired up the first universal steel plate mill in Canada. Dofasco was the firstcompany in North America to adopt basic oxygen furnace technology, in 1954. In 1996,Dofasco fired up an electric arc furnace and slab caster, the first of its kind for any fully-

integrated steelmaker on the continent.

Dofasco became the first Canadian manufacturer to introduce Profit Sharing in 1938.Profit Sharing remains today the centerpiece of a unique employee relations program.In 2006, Dofasco was purchased by Europe-based steelmaker Arcelor. During thistransition, Arcelor merged with Mittal Steel to become Arcelor Mittal. Today ArcelorMittal is the worlds largest steelmaker accounting for nearly 10% of global steelproduction.

INTRODUCTION

Arcelor Mittal Dofasco is a supplier of high quality flat rolled steels. Strategically locatedin the City of Hamilton at the western end of Lake Ontario on the St. Lawrence Seaway,Arcelor Mittal Dofasco is based in one of Canadas busiest Great Lakes seaports witheasy access to markets in Canada, the U.S. and around the world.The art facilities that are among the most efficient, flexible and technologically advancedin North America. These include three coke plants, two operating blast furnaces, a basicoxygen steelmaking furnace, an electric arc furnace, two slab casters, a hot strip rollingmill, pickling lines, cold rolling mills, annealing and tempering facilities, galvanizinglines, an electrolytic tinning line and two tube mills. The company produces hot

rolled, cold rolled, galvanized, ExtragalTM

, GalvalumeTM

, tinplate, chromium-coated and pre-painted flat rolled steels, as well astubularproducts. This wide range of steel products is sold to customers in theautomotive, construction, energy,manufacturing,pipe and tube, appliance, packaging and steel distribution industries.

All of Arcelor Mittal Dofasco's facilities in Hamilton are registered to ISO 9001 / TS16949 , ISO 14001 , and OHSAS 18001 registered.

http://www.dofasco.ca/bins/content_page.asp?cid=502-506-512http://www.dofasco.ca/bins/content_page.asp?cid=502-506-512http://www.dofasco.ca/bins/content_page.asp?cid=502-506-513http://www.dofasco.ca/bins/content_page.asp?cid=502-506-514http://www.dofasco.ca/bins/content_page.asp?cid=502-506-522http://www.dofasco.ca/bins/content_page.asp?cid=502-506-522http://www.dofasco.ca/bins/content_page.asp?cid=502-506-516http://www.dofasco.ca/bins/

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