Mergers Case Study Example | Topics and Well Written Essays - 1250 words

Mergers - Case Study ExampleThe Tata Group comprises around 90 companies with total turnover of US$22 billion, equivalent of around 3 per penny of Indias GDP.Tata Steel has one of the most modern firebrand making facilities and is also one of the lowest cost producers of steel in the world. It has been rated as the worlds best steel company for the past three consecutive years by World Steel Dynamics. World over, Tata Steel currently has a capacity of around 26 million machine translations per annum including its recent takeover of Corus and has the second largest global distribution network in 45 countries. Tata Steel which has also set benchmarks in the fields of somatic social responsibility and corporate governance firmly believes in improving the quality of life of its employees and the communities it serves. Tata Steel aspires to become a 50 Million tonne Steel Company by 2015.It was little hard for TATA Steel to swallow Corus as CSN, a Brazilian company was also in the race . The bidding war between Tata Steel and Brazilian company CSN was riveting and ended in a rapid-fire auction. Initial reactions to the deal argon highly diverse and retail investors are completely puzzled by the market reaction.TATA Steel had announced the refinancing of its GBP 3,260 million acquisition bridge facility and revolving facility was provided by ABN AMRO and Deutsche Bank, the financing formalities were undone off by April 2, 2007. Refinancing was also arranged which hearted to GBP 3,170 million and was done by a syndicate led by Citigroup, ABN AMRO and Standard Chartered Bank. This refinancing provides significant benefits and flexibleness over the term of the financing to the group.The Refinancing Facility comprises a five year GBP 1670 million amortizing loan which will be syndicated by the joint book runners to kindred banks of Tata Steel and Corus and a seven year minimally amortizing term loan of GBP 1500 million that will be syndicated to institutional inves tors and banks in the US, Europe and Asia.. The balance amount of the acquisition bridge is being repaid by an additional equity contribution by Tata Steel / Tata Steel Asia which had been previously disclosed on April 17, 2007.The Deal emergenceOn October 20, 2006, Tata Steel announced that it had agreed to pick up a 100% stake in the Anglo-Dutch steel maker Corus Group at 455 p. per percent in an all cash deal, cumulatively valued at GBP 4.3 billion (USD 8.04 billion). On November 19 2006, the Brazilian steel company CSN launched a counter house for Corus at 475 pence per share, valuing it at $8.4 billion. On December 11 2006, Tata preemptively upped the offer to 500 pence, which was within hours trumped by CSNs offer of 515 pence per share, valuing the deal at $ 9.6 Billion. The Corus board promptly recommended both(prenominal) the revised offers to its shareholders. On December 19 2006, Corus announced the followingIn the light of the competing offers for Corus by Tata Steel UK Limited (Tata) and CSN Acquisitions Limited (CSN), the Company announced on 12 December 2006 that the Corus Directors intended to propose resolutions to shareholders at each of the