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Tatas are out to conquer the world
Chris Noon, Forbes | October 06, 2006
Think of India, steel and consolidation and only one name springs to mind--that of metal maharajah Lakshmi Mittal.
Yet the Rajasthan-born, Kolkata-educated industrialist is missing from this plot. Tata Steel, part of the sprawling Tata conglomerate whose interests include cars, telecommunications, software consulting, hotels and consumer goods, said Thursday it was considering a bid for Anglo-Dutch rival Corus, illustrating the pressure the steel industry feels to consolidate.
When Tata's chairman, 68-year-old Ratan Tata, a Cornell-educated architect, succeeded his uncle J.R.D. Tata at the helm of the conglomerate 15 years ago, he set out to unite, refocus and modernise the company's 100 or so largely independent businesses. Aided by cash from its Tata Consultancy Services--the conglomerate's software unit--and the growth of India's economy, he has rebuilt the company's shareholdings in Tata Steel and increased its revenue sixfold.
Tata said a year ago that he was now looking at opportunities to invest in steel companies in developed countries, "but we are making sure that we have secure access to raw materials because I really believe that owners of iron ore are going to rule the industry. They will be the OPEC of the steel industry."
Neither came to fruition. On June 25, Mittal Steel decided to merge with Arcelor, with the new company to be called Arcelor Mittal. The merger has been successfully approved by shareholders and directors of Arcelor, making the company the largest steelmaker in the world. Abramovich never made a move for Corus.
Corus, which is much larger than its potential suitor and employs more than 40,000 people, declined comment Thursday.