NEW DELHI: The Tata Group, which offered $13.7 billion (Rs 60,333 crore) to buy Corus Group Plc, was prepared to pay an even higher price for the Anglo-Dutch steelmaker, said Chairman Ratan Tata on 1 February 2007.
Tata put up 608 pence ($11.93 ) a share to beat Brazilian rival Companhia Siderurgica Nacional (CSN) in a bidding contest for Corus.
The price, which topped an offer of 603 pence by CSN, was regarded by some investors as too high and Tata Steel shares dropped 10.7 percent on the Bombay Stock Exchange yesterday.
“Let me put it this way,” Tata, 68, said in an interview to a newspaper. “At 608 pence, we hadn’t reached the limit we had set ourselves.”
Tata said he had to make an offer “compatible to the market price.”
The group had offered 5.1 billion pounds for Corus last October but finally shelled out more than a third extra.
The biggest overseas acqusition by an Indian company would catapult Tata into the world’s fifth-largest steelmaker with an annual output of about 25 million tonnes and 87,000 employees. About 60 percent of annual turnover of Tata Group, with businesses ranging from salt to software, would come from the steel operation.
“IT and telecom is where the group’s growth will come from in the future,” Tata, an MBA from Harvard, said. “The skew is because these are relatively newer businesses as compared to steel.”
The group was founded in 1869, under the British colonial era, by Jamsetji Tata, who began a textile trading business in Mumbai and went on to construct the country’s first hydro-electricity plant and steel mill.
Tata Steel, established in 1907, has previously stated that its Corus takeover plans would create a high-quality, low-cost, attractive growth platform in Asia combined with a leading European steel player.
Tata and Corus have set up a committee to oversee the integration of the two companies “seamlessly,” the Tata Group chairman said.
“When the hurdles come, we will deal with it,” he added.