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Tata 'to launch bid for Corus' Tata poised for £5bn Corus offer
(about 10 hours later)
Indian firm Tata Steel is close to launching an offer for Anglo-Dutch firm Corus, the BBC has learned. India's Tata Steel is close to launching a £5bn ($9.3bn) takeover bid for Anglo-Dutch steel firm Corus, the BBC has learned.
If successful it would be the largest Indian takeover of a foreign company and create the world's fifth largest steel firm. If successful it would be the largest Indian takeover of a foreign company and create the world's fifth-largest steel firm.
Earlier in the week Tata Steel, which is part of the Tata industrial group, said it was "evaluating various opportunities including Corus". Last week, Tata Steel, part of the Tata conglomerate, said it was looking at potential takeovers "including Corus".
Tata will be in London this week to meet the UK Prime Minister Tony Blair.Tata will be in London this week to meet the UK Prime Minister Tony Blair.
The news comes as The Sunday Telegraph reported that the firm had lined up a £3.5bn ($6.5bn) financing deal to make the acquisition. Its visit as part of an Indian business delegation coincides with the arrival of Indian Prime Minister Manmohan Singh for an Indo-UK summit.
News of a potential Corus bid came as the Sunday Telegraph reported Tata had lined up a £3.5bn ($6.5bn) financing deal to make the acquisition.
ConsolidationConsolidation
The news comes after Mittal Steel bought rival Arcelor earlier this year for $34bn. Rapid economic growth in developing countries including China and India is creating huge demand for steel and many firms are looking to add to their steel-making assets.
With competition increasing - especially from China - steel firms have been keen to merge in a bid to cut costs. But as Chinese steel production soars, other manufacturers are trying to consolidate so they can cut costs and stay competitive.
China has moved from being a net importer of steel to becoming a net exporter of steel. Earlier this year Mittal Steel bought rival Arcelor for $34bn, creating the world's biggest steel maker.
Tata Steel is the largest private steel producer in India and has outlets in a number of countries including Thailand, Sri Lanka and Australia. Tata Steel is a small steel producer by global standards, but has the backing of the giant Tata Group, one of India's largest companies with interests as diverse as carmaking, communications, tea and oil.
"Given recent industry consolidation, Tata Steel is reviewing a number of global opportunities," Tata Steel said in a statement earlier in the week. Corus was created after British Steel merged with Dutch firm Hoogovens in 1999 and has shed thousands of jobs in recent years.
Corus - which was created after British Steel merged with Dutch firm Koninklijke Hoogovens in October 1988 was not available for comment. It employs 47,300 people worldwide and reported a pre-tax profit of £580m last year.