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Corus buy is moment of fulfilment: Tata
January 31, 2007 11:42 IST
Exuberant after a thriller deal to acquire Anglo-Dutch steel giant Corus for 11.3 billion dollars, Tata Group supremo Ratan Tata on Wednesday dubbed the victory as 'a moment of fulfilment for India.'
"This will prove to be a visionary move...," Tata told reporters within hours of Tata Steel making a winning bid of 608 pence a share for Corus to trump Brazilian CSN that would elevate the group company to the world's fifth largest steel entity.
At the same time, he took a dig at the critics, saying: "When we launched the bid for Corus, many thought it was an audacious move, because an Indian company taking over an European company much larger in size has not happened before."
He said Tata Steel would become a global scale player with footprint in Europe to become 'the fifth largest steelmaker in the world,' while announcing that the present management would be retained and Corus would be integrated with Tata Steel.
This has demonstrated that Indian industry can step outside of India in the international market as a global player, he said.
The Mittal Steel-Arcelor saga
"I have always believed that if you want to become a global company, you have to dismiss your notion of being a single nationality," Tata said.
On Tata Steel share prices taking a hit on Wednesday, Tata said the market was 'taking both a short-term and a harsh view. We often damn a company when it makes loss in a year...hopefully in future it (market) will look back and say it
(acquisition) was a right move.'
Tata Steel Managing Director B Muthuraman termed the acquisition as part of the company's strategic planning, saying it planned for greenfield capacity where raw materials were available, while looking for acquisitions where there was market like it did in taking over NatSteel and Millennium in Singapore and Thailand, respectively.
He agreed that nine times the EBIDTA margin quoted by Tata for Corus was a bit higher by industry standards, but the company would benefit from significant synergies although it would take three years to fructify.
Muthuraman said the company was looking at a synergy of $300 to $350 million a year.