London: Indian conglomerate Tata Group’s $12 billion takeover of Anglo-Dutch giant Corus Group Plc reached its culmination with the deal coming into effect from 2 April 2007, making Tata Steel the world’s fifth largest steel firm.
The Anglo-Dutch steel giant on 2 April announced the scheme of arrangement related to the company’s takeover by Tata Steel at a price of 608 pence a share has now become effective.
With this, Corus has become a subsidiary of Tata Steel, which now has about 24 million tonnes of production capacity.
The announcement came after the approval of the deal by Corus shareholders on 7 March and by a UK court on 27 March and suspension in trading of Corus shares on 30 March.
The only formality left in this deal, which marks the biggest ever overseas acquisition by an Indian entity, is the payment of the balance amount by Tata Steel, which has already spent close to $2.5 billion by acquiring a 21% stake in Corus through open market transactions.
Tata Steel had said on 7 February it intends to make the payments as soon as possible on or after the effective date.
Under the terms of the agreement, Tata Steel is required to make all the payments within 14 days of the deal coming into effect, that is by 16 April.
Tatas’ bid for Corus went through lots of turbulence since 4 October when it confirmed talks for the acquisition — mainly after it was rivalled by Brazil’s CSN, which said it plans to launch a 475 pence offer to better Tata Steels earlier offer of 455 pence.
Tata Steel later revised their bid to 500 pence a share, but were outbid within hours with a 515 pence offer from CSN. The competing bids forced the UK Takeover Panel, the British merger and acquisition watchdog, to step in with an auction process to determine the winner.