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Mergers & acquisition
1.
2.
3. • Grasping for the company simply because its
on the market, or because competitor wants
to buy
• Overpayment Or misguidance
• Inability to integrate well
• Diverse business Or unmanageable
• Leap without looking at the value
4. Profile of TATA Steel
• Vision:- “we aspire to be global steel industry
benchmark for value creation & Corporate citizenship”
• Global presence in South East Asia, China, Australia
• It acquired Natsteel Singapore for $486.4 Million
• It bought 67% stake in Thailand based Millenium Steel
• Low cost producers in the world
• Strong retail & distribution network in India & South
east Asia
5.
6.
7. Profile of pre merger
TATA STEEL Corus
102 years in steel Bazaar Worlds 6Th largest
Presence in 26 Nations Presence in 50 Nations
Capacity 30 Million 371 rank in fortune 500 list
Worlds 56th largest 2nd in Europe, No.1 in UK
Founder J N TATA 40,000 workforce worldwide
8.
9.
10.
11.
12.
13. Synergies of Operation
• Significant cost of saving Expected by exporting
Cheaper input (slabs)
• Combined entity emerge as second most
geographically diversified
• Synergy result from sharing manufacturing
practice, shared services and purchasing
• Also sharing complementary strength
• Strong R&D & product development capabilities
for value added products in Auto, construction &
packaging (which compliments growing markets
such as Asia)
14. Corus TATA STEEL
J P Morgan ABN Amro
Cazenovt Deutche bank
HSBC Standard chartered
bank
15.
16.
17. Five year Financial Performance of TATA
Category Unit 2002 03 04 05 06
Production ‘000 MT 3.636 3.941 4.089 4.109 4.552
Revenue $In Millions 1583 2150 2755 3532 3884
EBIT $In Millions 283 516 840 1378 1401
EBIT MARG % 20 27 34 42 40
PBT $In Millions 52 277 616 1178 1187
Net Profit $In Millions 43 222 404 773 794
Net profit
margins
% 3 12 16 24 23
EVA $In Millions .96 34 156 528 529
18. Five year Financial Performance of CORUS
Category Unit 2002 03 04 05 06
Production ‘000 MT 17.1 19.4 19.5 18.7 18.8
Revenue ($) In Millions 11456 10018 12165 10845 12845
EBIT ($) In Millions 512 305 1251 1142 1846
EBIT MARG % -4.47 3.04 10.28 10.53 14.37
PBT ($) In Millions -644 -321 766 649 610.35
Net Profit ($) In Millions -741 -388 593 512 446
Net profit
margins
% -6.47 -3.87 4.87 4.72 3.47
23. “we had taken a view that we
wouldn’t go beyond a point. We
didn’t reach that point .If we
reached that point we would
walked away. over bidding (or)
not is subjective when it comes
to judgment class”.