TATA Steel buys Corus

So TATAs finally win the bidding war to buy Corus Steel. You can read about it here and here.

The purchase price of 608 pence per share or $11.3 Bn is 33% more than what was initially offered by TATA and accepted by Corus in Oct 2006. Entry of Brazilian rival CSN pushed up the price to this level which most analysts believe to be too high. TATA steel lost 11% on Indian stock market on the first day of the announcement. However, it was seen as a coming of age of The Indian Industry by some. TATA group chairman Ratan Tata described it as a moment of triumph. This catapults TATA steel to 5th position from its 56th position in the list of global Steel makers. Undoubtedly it moves TATA steel to the global arena. The question remains however, if the steep price paid by TATA Steel will cripple the whole group. Did emotion to pull off a big deal like this won over commercial sense? Will TATA steel be able to pull off this acquisition successfully? These questions remain to be answered.

There is a delicious bit of irony here. When Sir Frederic Upcott, Chief Commissioner of Railways in India, heard that TATAs were going to set up a steel plant in India, he replied:

" Do you mean to say that TATAs propose to make steel rails to British specifications? Why, I will undertake to eat every pound of steel rail they succeed in making"
( From: Beyond the last blue mountain, A life of JRD Tata)

Famous words!

As a Chess lover I wonder if Corus Chess will now be called TATA Chess and if it will now be held in Jamshedpur? I would love that!