Facts about Tata's Corus Deal

This blog will soon come out of Ratan Tata shadow, as their are many other things to cover. Life seems to be too short to cover everything :)

Quick facts about Tata-Corus deal
1. Corus Group plc, normally referred to simply as Corus, is one of the world's largest producers of steel, headquartered in London. It is listed on the London Stock Exchange (where it is a constituent of the FTSE 100 Index), Euronext Amsterdam and the New York Stock Exchange.
2. Group turnover for the year to 31 December 2005 was £10.142 Billion. Profits were £580 million before tax and £451 million after tax.
3. On January 30, 2007, Tata Steel, part of India's Tata Group, has purchased 100% stake in the Corus Group at 608 p. per share in an all cash deal, cumulatively valued at (USD 12.04 Billion).
4. Tata's bid is 49-percent above Corus's closing share price on October 4, the day before Tata Steel first revealed its interest. It is also a third higher than Tata Steel's first bid of 455 pence a share and 18 percent above CSN's bid of 515 pence a share
5. Corus shares jumped 7 percent to near the bid price, and shares in other European steel stocks also rose, with Arcelor Mittal (MTP.PA) hitting a new high of 36.32 euros, Germany's ThyssenKrupp (TKAG.DE) up 1.3 percent and Finland's Outokumpu (OUT1V.HE) up 3.2 percent by 1050 GMT.
6. Tata Steel shares, however, closed down 10.7 percent, their biggest daily fall for 8 months, on fears it was overpaying for Corus
7. The deal will triple Tata Steel's capacity to almost 28 million metric tons a year, from 8.7 million now, at half the cost of building new plants.
8. The most expensive rating previously put on a steel company was when Mittal bought Arcelor last year for $32 billion. Mittal paid 6.2 times Arcelor’s earnings. For Corus, Tata is paying nine times earnings.
9. According to Jitesh Gadhia, of the investment bank ABN Amro, adviser to Tata, It makes more sense to look at the enterprise value (equity plus debt) paid per tonne of steel production capacity. For Mittal /Arcelor it was about $670 a tonne, and for Corus slightly above $700 a tonne.

- Mumbaikar