"I believe this will be the first step in ensuring that the Indian industry can step outside the shores of India in an international market and acquit itself as a global player."
B Muthuraman, managing director, Tata Steel, said the acquisition cost of 608 pence per share for Corus may look expensive since it is about nine times 2005 EV/EBIDTA.
"But the acquisition is a tremendous strategic fit for Tata Steel. The cost we have agreed to pay is nearly half that of setting up a capacity of Corus's size. Plus, the acquisition will provide us a presence in the more matured (than India and China) markets like Europe.This will also give us an opportunity to go into downstream products.
"The agreed price of 608 pence per share translates into an enterprise value of $700 per tonne. If you go in for a green-field project of this size, having the downstream exposure of Corus, the enterprise value should be $1200-1300 a tonne."