Corus commands more than half of the 15 million tonne UK steel market. So, the acquisition will enable Tata Steel to easily leverage its existing network and already built-up goodwill in the UK.

In addition, Corus has strong relationships with its customers in Europe, particularly in the high-margin segments such as construction, automobile and aerospace.

The Anglo-Dutch company is believed to enjoy nearly 14-15 per cent share in the European auto steel grade market.

Corus, which has for several years been focusing on expanding its presence in higher-margin products, has 41 per cent of its 18 million tonne capacity geared for strip products, including cold-rolled product applications for the auto industry. Of the capacity 21 per cent is for long products used in railway lines, beams, wire, reinforcing bar etc.

In FY06, Tata Steel had sold nearly 350,000 tonne of cold-rolled auto-grade steel, which accounted for more than one-third of the domestic market, nearly 37 per cent.

In contrast, in CY05, Corus is estimated to have generated nearly half of its turnover of �9.2 billion from Europe.

And, as Tata Steel's export size in Europe as a proportion of its total sales is negligible, the synergies, from the deal, are expected to be significant for the company in the medium term.

Expanding its presence in east Asian auto grade steel market had been the key motive behind Tata Steel's earlier acquisitions of Thai-based Millennium Steel and Singapore-based NatSteel Asia, analysts said.

The company's current capacity, excluding its earlier acquisitions of Millennium Steel and NatSteel Asia is 5 million tonne. In line with the target, Tata Steel has already started the capacity expansion by 1.8 million tonne of its Jamshedpur facility.

The company has also signed an MoU for setting up a 12 million tonne greenfield steel plant in Jharkhand, in two phases. Besides, Tata Steel has planned a 6 million tonne steel project at Duburi in Orissa.