Good Morning

100 years of TATA steel 100 moments of nation building Presented by: Ashish Sanatkumar Swayam

Mergers and Acquisitions:

Mergers- A merger is a combination of two companies into one

larger company, which involves stock swap or cash paymment.

When one company takes over another and clearly established itself as the new owner, the purchase is called an acquisition.

Types of merger:
Horizontal merger
Vertical Merger Reverse merger

Common reasons of mergers and acquisition :(Buyers looking for)

An opportunity to grow faster, with a ready-made market share.
To eliminate a competitor by buying it out. Better integration-horizontal or vertical. Diversification with minimum cost and immediate profit. To improve dividend yield, earnings or book value. To forestall(prevent) the companys own takeover by a third party. To enjoy the prospect of turning around a sick company

(sellers looking for)

Declining sales or earnings.
An uncertain future. Owners wants to slow down or retire with no successor in sight. Desire to maximize growth under the umbrella of a larger company. A lack of adequate financial and management skills. To concentrate time and effort on what it can do best.

Disadvantages of merger :
Clashes of culture between different types of

businesses. Conflicts of objectives. Mergers can lead to job losses.

Worlds 5th Biggest Steel Producer.

PROFILE PRE MERGER

TATA STEEL
102 years in steel bazaar Worlds 56th largest Capacity of 30 Million

CORUS
Worlds 6th largest 2nd in Europe,1st in UK 371st rank in fortune list

Founder: J.N. Tata

Presence in 26 nations

Presence in 50 nations
40,000 people worldwide.

Major Acquisitions Big Deals

Target Arcelor NKK Corp

Buyer Mittal Steel Kawasaki Steel

Value ($bn) 32.2 14.1

Year 2006 2001

LNM Holdings
Krupp AG Corus Dofasco Intl Steel

Ispat Intl
Thyssen Tata Steel Arcelor Mittal Steel

13.3
8.3 8.0 5.2 4.8

2004
1997 2006 2005 2005

Acquisition:
On 20 Oct 2006 the board of directors of Anglo-Dutch

steelmaker Corus accepted a $7.6 billion takeover bid from Tata Steel. . Finally, on January 30, 2007, Tata Steel purchased a 100% stake in the Corus Group $12 billion. The price per share was 608 pence(rs 484), which is 33.6% higher than the first offer which was 455 pence.

Acquisition Process
Particulars Corus Currency: Rupee Millions TATA Steel Ltd Currency: Rupee Millions Year 2006 2005 2004 2006 2005 2004

ASSETS

582750.00

533925.00

467775.00

205,450.70

177,033.10

147,988.70

DEBTS

98100.00

105525.00

96000.00

45,932.70

42,073.10

39,982.90

LIABILITIES

231300.00

178425.00

155475.00

30492.10

33146.80

32665.90

REVENUE

760500.00

699900.00

596475.00

202,444.30

159,986.10

111,294.40

NET INCOME

33900.00

33450.00

-22875.00

37,346.20

36,032.60

17,887.80

Benefits for the TATA:

Corus' well known strength is the production of high-

end steel-used in construction automobile. It also gave its access to the important markets of Europe. Tata Steel now is the fifth largest steel company from fifty sixth initially with an annual production of around 24 million tones. Synergy.

Negotiation By Tata
September 20, 2006 : Corus Steel has decided to acquire a strategic

partnership with a Company that is a low cost producer October 5, 2006 : The Indian steel giant, Tata Steel wants to fulfill its ambition to Expand its business further. October 6, 2006 : The initial offer from Tata Steel is considered to be too low both by Corus and analysts. October 17, 2006 : Tata Steel has kept its offer to 455p per share. October 20, 2006 : Corus accepts terms of 4.3 billion takeover bid from Tata Steel November 18, 2006 : The battle over Corus intensifies when Brazilian group CSN approached the board of the company with a bid of 475p per share. April 2, 2007 : Tata Steel manages to win the acquisition to CSN and has the full voting support from Corus shareholders.

Business Resources

Structure
Culture Leadership Person

Objective
M&A Strategy

Conclusion :
With Corus in its fold, Tata Steel can confidently target becoming one of the top-3 steel makers globally by 2015.
a company can achieve its strategic objectives and thus ensure its growth through Acquisition.

Thank You