Tatas beat Brazil's CSN to acquire Anglo-Dutch steelmaker Corus Group The Tatas beat Brazil's CSN to acquire Anglo-Dutch steelmaker Corus Group Plc

The Tatas beat Brazil's CSN to acquire Anglo-Dutch steelmaker Corus Group Plc at slightly more than $11 billion.

With a bid of 608 pence a share, Indian corporate giant Tata Steel outsmarted CSN's 603 pence a share offer during the night-long auction process.

CSN officials confirmed pulling out of the race to acquire Europe's second-largest steel firm after a final offer of 603 pence a share. Tata officials remained tightlipped.

Tata Steel raised its final offer to 608 pence a share by the time the auction entered the concluding ninth round from 500 pence a share at the start of the auction.

The company also stated that it will shortly seek approval of its revised offer from the Board of Corus Group Plc and the $11.3 billion transaction is likely to be finished by the mid-March this year.

Enterprise value

Announcing the auction outcome, the UK Takeover Panel said Tata Steel bid 608 pence a share in cash as against CSN's 603 pence a share.

"This auction procedure has now completed," the Panel said in an e-mailed statement.

Tata Steel's winning bid of $11.3 billion puts Corus Group's enterprise value, which includes debt, at more than $13 billion.

"Tatas are not new to takeovers. It will not be difficult for them to integrate the two companies and bring in synergies," said Seshagiri Rao, Director Finance, JSW Steel.

The takeover marks the largest acquisition by an Indian company and would propel the combined entity led by Tata Steel to the fifth rank in steel output in the world.

"This feels good as it shows the resilience of Indian economy. Global perception about India is changing. Consolidation in the industry is an important step for competitiveness," said Kamal Nath, Minister for Commerce and Industry.

Auction norms

The nine-round auction called by the UK Takeover Panel began at 10:00 pm (IST) on Tuesday.

Tata Steel had initially bid $9.2 billion against CSN's higher $9.6 billion last month, prompting the UK Takeover Panel to intervene and pick the winner through open bidding.

Under the auction norms, each suitor was required to raise bids by a minimum of five pence per share.

With this win, Tata Steel has now entered the big league of the global steel industry. Tata-Corus would have a combined production of more than 23 million tonnes.

Currently, Arcelor-Mittal is the world's largest company in this space, followed by Japan's Nippon Steel and South Korea's Posco.

The Corus acquisition would also help Tata Steel to be a 40 million tonne per year entity by 2012.