Indian steel firm considers move for UK's Corus

A bumper $6.5bn finance package was today reported to have been put together by India’s Tata Steel as it considers a move for Corus.

A bumper $6.5bn finance package was today reported to have been put together by India’s Tata Steel as it considers a move for Corus.

The former British Steel company is thought to be a target for Tata, which is part of one of India’s biggest business conglomerates.

Corus refused to comment on the speculation today, but the Sunday Telegraph believes the package is a clear sign Tata is serious about a bid.

On Tuesday, Tata Steel – part of the massive Tata Group which owns Tetley Tea - said it was considering takeover opportunities around the world “including Corus”.

And the newspaper believes Deutsche Bank and ABN Amro, along with Standard Chartered, have all provided funding to the company for a potential takeover.

Reports in India suggested Tata Steel was willing to pay around £5bn for Corus, although the firm warned there was no certainty an offer would be made.

Elsewhere, the Observer reported Corus chief executive Philippe Varin stands to make more than £8m if a deal is eventually sewn up.

It said Varin, who has run the firm since May 2003, has 1.4 million shares and options in the company as part of a long-term incentive scheme.

Last year Corus was the ninth largest steel producer in the world with 18.2 million tonnes of output – much lower than Mittal’s 63 million tonnes and Arcelor’s 46.7 million tonnes.

Tata Steel was the 56th biggest producer with just 4.4 million tonnes of output, but the wider Tata Group is one of India’s largest companies with revenues of £12bn – the equivalent of almost 3% of India’s GDP.

Its operations include tea, hotels, satellite television and utilities.

Corus, which was set up through the merger of British Steel and Dutch group Hoogovens in 1999, employs 47,300 people worldwide, including 24,000 in the UK at sites including Scunthorpe, Rotherham and Port Talbot.

Last year it banked pre-tax profits of £580m on turnover of £10.14bn, although lower selling prices and higher costs hit operations in the first half of this year.

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