Tata Steel Analysis
Tata Steel Analysis
Tata Steel Analysis
Group 6: Section B
Abhishek Singh Parihar (G15063)
Anupam Kalita (G15071)
Manoj Kumar Mohapatra (G15089)
Rajdeep Basu (G15102)
AGENDA
Overview of Corus
Acquisition
Post Acquisition
Some Drawbacks:
Market:
Europe : >50%
UK : 30%
Some Drawbacks:
Buyers Power
Moderate
Increasing
Demand
Many perceived
this to be
commoditized
product
Low switching
cost
Large buyers
have full info
about the market
Competitive Rivalry
Very High
Threat of Substitutes
Low
Suppliers
Power High
23 Subsidiaries
Associate of :
Tata Incorporated
WHY ACQUISITION?
To tap the European Market.
Acquisition cost is lower than setting up a green
field plant.
Technology benefit.
Corus holds number of patents and R&D
facilities.
Corus produced high valued stripped products.
Tata
THE DEAL
DEAL STRUCTURE
Tata Steel Ltd. (India)
Tulip UK Holdings UK
Source: MoneyControl
Mar '10
Mar '09
Mar '08
Mar '07
1153.99
2018.91
1801.52
433.21
3.63
9.38
10.63
25.51
-1.95
3.34
9.35
16.28
Current Ratio
1.33
1.59
1.58
1.73
2.31
3.00
2.06
1.72
1.64
2.08
1.90
0.63
FINANCIAL ANALYSIS
Many financial analyst believed that Tata Steel
overpaid for Corus.
Tata Steel stock price fell by 10.7% to Rs 463.95
Huge debt -> adverse effect on financial risk
profile
Moodys Rating Baa2 (investment grade) to
Ba1(speculative grade)
MARKETING ANALYSIS
Before Acquisition of Corus
OPERATIONAL ANALYSIS
Before Acquisition of
Corus
HR & ANALYSIS
CULTURAL FIT
Long-standing relationship
between Tata Steel and Corus
Tata Steel engaged Ijmuiden
operations of Corus in 1992 to
help it in coke making and blast
furnace facilities improvement
Strategic commercial relationship
Management at both Tata Steel
and Corus focused on improving
operating efficiency and
productivity
Merger and Acquisition experts
recommended a light-handed
integration between Tata Steel
and Corus instead of an
organizational overhaul
Trusteeship
Integrity
Respect for the Individual
Credibility
Excellence
THANK YOU