Anglo-Dutch steel firm Corus has agreed to a US $8.1 billion (£6.4billion) takeover offer from Indian rival Tata Steel, after weeks of negotiations.
The deal is the largest Indian takeover of a foreign company.
The Corus board backed the 856 cents-a-share bid from Tata – part of the Tata Group, which owns Tetley Tea – to form the fifth largest steel maker in the world with an estimated production of 23.5 million tonnes a year.
Jim Leng, chairman of Corus, said the move would create a strategically well-balanced company.
“This offer from Tata Steel reflects the substantial value created for Corus shareholders since the placing, open offer and launch of our ‘Restoring Success’ programme in 2003.
In the middle of last year, my board agreed a strategic way forward for Corus to seek access to low-cost production and high growth markets.
Consistent with this, the company held talks with a number of parties from Brazil, Russia and India.
This transaction represents the culmination of these talks.
“This combination with Tata, for Corus shareholders and employees alike, represents the right partner at the right time at the right price and on the right terms.”
Corus was formed out of the 1999 merger of British Steel and Dutch group Hoogovens.
It employs 47,300 people worldwide, including 24,000 in the UK at plants in Port Talbot, Scunthorpe and Rotherham.
Tata Steel is India’s largest private sector steel company with 2005/06 revenues of $5 billion and crude steel production of 5.3 million tonnes across India and South East Asia.
It is a vertically integrated manufacturer and is one of the world’s most profitable and value-creating steel companies.
“This proposed acquisition represents a defining moment for Tata Steel and is entirely consistent with our strategy of growth through international expansion,” said Ratan Tata, chairman, Tata Steel.For all the latest construction news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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