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Tata Steel-Corus merger reports untrue
December 15, 2008 12:44 IST
Last Updated: December 15, 2008 18:15 IST
The Tata-owned Corus on Monday termed "completely untrue" the media reports stating that the European steel maker is to be merged with Tata Steel [Get Quote], to save as much as 350 million pounds.
"Both stories are completely untrue. We are talking to (the) newspapers to get corrections. I repeat, both stories are completely untrue," Corus Spokesperson Bob Jones told PTI, denying reports that emanated in the online editions of two leading dailies in the United Kingdom.
The Tata Group had acquired the Anglo-Dutch giant Corus Group Plc for $12 billion last year, after which Corus became a subsidiary of the Indian steel giant. However, even after amalgamation, both the units operated independently.
The media reports on a possible merger between Corus and its parent subsidiary Tata Steel come when the European Steel maker has resorted to cost-cutting including layoff schemes and production reduction because steel demand as well as prices have plunged due to the global economic downturn.
British newspapers The Mail and The Daily Mail in their online editions had said that Corus is set to be merged with Tata Steel by next year to save up to 350 million pounds, and added that such a move is likely to put thousands of jobs at risk.
"Corus, formerly British Steel, is to be merged with its parent company Tata Steel, in a move that puts thousands more UK jobs at risk," The Mail said in its online edition.
Tata Steel through this merger aims to create a group that could become the biggest steel maker in the world after Luxembourg-based ArcelorMittal, the report further said.
"News of the plan could undermine delicate negotiations in which unions are discussing accepting pay cuts of up to 10 per cent for the workforce of 25,000, including the 1,000 workers at the threatened Llanwern steel works in South Wales," The Mail added. Quoting Alan Todd, construction and development general manager at Corus, the report said: "Tata Steel's construction-related assets would benefit from Corus in the UK and the Continent and there would also be huge cost benefits from the Tatas' supply of raw materials."
Earlier, on December 11, unions offered to accept a 10 per cent cut in pay for six months in a last-ditch to save the factory in Wales from closure.
Globally, steel prices have almost halved to $600 a tonne from the peak of $1,250 per tonne earlier this year.
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