General Presentation (MACR)

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    MERGERS & ACQUISITION

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    Mergers- A merger is a combination of two companies

    into one larger company, which involves stock swap or

    cash payment to the target.

    Acquisition - When one company takes over another and

    clearly establisheditself as the new owner, the purchase

    is called an acquisition.

    From a legal point of view, the target company ceases toexist, the buyer "swallows" the business and the buyer's

    stock continues to be traded.

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    WHY?

    Gain market share

    Economies of scale

    Enter new markets

    Acquire technology Utilization of surplus funds

    Managerial Effectiveness

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    PROFILE PRE MERGER

    102 years in steel bazaar

    Worlds 56th largest

    Capacity of 30 Million

    Founder:J.N. Tata

    Presence in 26 nations

    Worlds 6th largest

    2nd in Europe,1st in UK

    Presence in 50 nations

    40,000 people

    worldwide.

    TATA STEEL CORUS

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    Acquisition

    Structure

    Asset Purchase

    Business Purchase

    Share Purchase

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    Acquisition

    TATA-CORUS

    Tata acquired Corus, which is four times larger thanits

    size and the largest steel producer in the U.K. The

    deal, which creates the world's fifth-largeststeelmaker,is India's largest ever foreign takeover

    and follows Mittal Steel's $31 billion acquisition of

    rival Arcelor in the same year.

    Tata acquired Corus on the 2nd of April 2007 for a

    price of $12 billion. The price per share was 608

    pence(rs 484), which is 33.6% higher than the first

    offer which was 455 pence.

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    Process of Acquisition

    Finding A Target Business

    Appointing Advisers

    Negotiating terms Due Diligence

    Exchange of Contracts

    Completion

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    Negotiation By Tata

    September 20, 2006 :Corus Steel has decided to acquire a strategic

    partnership with a Company that is a low cost producer

    October 6, 2006 :The initial offer from Tata Steel is considered to be too

    low both by Corus and analysts.

    October 17, 2006 :Tata Steel has kept its offer to 455p per share. October 18, 2006 :Tata still doesnt react to Corus andits bid price remains

    the same.

    October 20, 2006 :Corus accepts terms of 4.3 billion takeover bid from

    Tata Steel

    October 23, 2006 :The Brazilian Steel Group CSN recruits a leading

    investment bank to offer advice on possible counter-offer to Tata Steels

    bid.

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    November 3, 2006 :The Russian steel giant Severstal announces officially that it will

    not make a bid for Corus

    November 18, 2006 :The battle over Corus intensifies when Brazilian group CSN

    approached the board of the company with a bid of 475p per share

    December 18, 2006 :Within hours of Tata Steel increasing its original bid for Corus to500 pence per share, Brazil's CSN made its formal counter bid for Corus at 515 pence

    per share in cash, 3% more than Tata Steel's

    Offer.

    January 31, 2007:Britain's Takeover Panel announces in an e-mailed statement that

    after an auction Tata Steel had agreed to offer Corus investors 608 pence per share

    in cash

    April 2, 2007:Tata Steel manages to win the acquisition to CSN and has the full voting

    support from Corus shareholders

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    Financing the Deal

    TATA- CORUS Deal - $12 billion

    Equity Contribution from Tata Steel- $3.88 billion

    Credit Suisse leaded, joined by ABN AMRO and

    Deutsche Bank in the consortium.

    Of the $ 8.12 billion of financing , Credit Suisse

    provided 45% and ABN AMRO and Deutsche

    provided 27.5% each.

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    WHY CASH DEAL?

    Tata Steel's security credit rating was investment

    grade whereas Tata Steel UK had a lower security

    credit rating.

    'share swap' deal less attractive to the Corus

    shareholders.

    'share swap' would have diluted Tata Steel's equity

    base.

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    Global Steel Ranking: (Ranking of Tata steel before deal- 55)

    Company Capacity (inmillion

    tonnes)

    Arcelor - Mittal 110.0

    Nippon Steel 32.0

    Posco 30.5

    JEF Steel 30.0

    Tata Steel - Corus 27.7

    Bao Steel China 23.0

    US Steel 19.0

    Nucor 18.5

    Riva 17.5

    Thyssen Krupp 16.5

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    Conclusion

    With Corus inits fold, Tata Steel can confidently target

    becoming one of the top-3 steel makers globally by 2015. The

    company would have an aggregate capacity of close to 56

    million tones per annum,if all the planned Greenfield capacities

    go on stream by then.

    We can conclude that if the acquisitions well planned, Executed

    and the necessary precautions taken for the deal a company

    can achieve its strategic objectives and thus ensure its growththrough Acquisition.

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    THANK YOU