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India's Tata Steel says it is considering a bid for steelmaker Corus

India's Tata Steel says it is considering a bid for steelmaker Corus

Shares in Corus Group PLC soared more than 16 percent Thursday after India's Tata Steel said it was considering a possible bid for the London-based steelmaker.
Tata Steel said it was reviewing a number of global opportunities following recent industry consolidation.
"In this context, Tata Steel is evaluating various opportunities including Corus," the company said in response to Indian newspaper reports that it was contemplating a US$10.6 billion (euro8.36 billion) bid for the Anglo-Dutch steelmaker.
"However, there can be no certainty that an approach will be made and, if made, that it will result in an offer for Corus," Tata added in the statement to the London and Mumbai stock exchanges.
Mumbai-based Tata Steel declined to expand on its statement and Corus also declined to comment.
Shares in Corus closed 16.3 percent higher at 473.75 pence (US$8.90; euro7.02) on the London Stock Exchange. Shares in Tata Steel, which is a subsidiary of the sprawling Tata Group, closed 2.7 percent higher on the Mumbai Stock Exchange at 537.35 Indian rupees (US$11.77; euro9.27).
Corus has previously said it would make sense for the company to team up with a low-cost partner with assets in countries such as Brazil, India and Russia.
Consolidation of the steel industry has been on the cards since Mittal Steel Co. NV's won its battle to take over Arcelor SA earlier this year in a deal that will create a titan with control of close to 10 percent of global production. Some analysts argue that further consolidation will give the industry more pricing power and greater economies of scale.
Corus, which was set up through the merger of British Steel and Dutch group Hoogovens in 1999, is the world's ninth-largest steel producer by 2005 output and Tata is in 56th place, according to figures from the International Iron and Steel Institute.
A combined Tata-Corus entity would have an annual steel production of 25 million tons, making it the world's fifth or sixth largest steel producer, according to a recent JP Morgan report based on 2005 figures.
Tata Steel Managing Director B. Muthuraman has previously said the company plans to expand its business through a mix of acquisitions and greenfield projects in India and overseas.
The company, whose current market capitalization is around US$6.47 billion (euro5.1 billion), plans to expand its capacity more than fivefold to 25 million tons by 2015, from around 5.2 million tons now in India.
Last December, it agreed to buy a 40 percent stake in Thailand's Millennium Steel PCL for around US$73 million and it February 2005 it bought the 2 million ton a year steelmaking operations of Singapore's NatSteel Ltd.


Updated : 2021-03-08 11:57 GMT+08:00