Tatas hunting for more raw materials

Tata Steel is scanning the globe for iron ore, coal and natural gas resources and has already made proposals in Australia for coal blocks.

Addressing his first press conference in Jamshedpur after clinching the Corus deal, Tata Sons Chairman Ratan Tata said the company was looking to buy raw material resources such as iron ore, coal and natural gas either on its own or with a partner. He did not give details of the overseas locations but said Tata Steel would continue to explore possibilities.

Tata was in Jamshedpur for Tata Steel's Founder's Day celebrations. Special guests at the event included Corus Chairman Jim Leng and Chief Executive Officer Philippe Varin.

The proposals in Australia would be much larger than its five per cent stake in the Carborough Downs Project in Queensland, Australia.

Tata Steel Managing Director B Muthuraman said the Carborough Downs stake was a small one and the company was looking at much more than that.

The move would make Corus competitive, given that it does not own any iron ore mines.

However, both Tata and Muthuraman clarified that the synergies with Corus were beyond raw material advantages that could make the Anglo Dutch steelmaker more cost competitive.

Tata Steel had set up an integration committee, which would be chaired by Ratan Tata. The committee would act as a shadow board to the Corus management and look at the welfare of both the companies.

Tata said Corus would continue under the same management. The committee also comprises Muthuraman and some Corus representatives.

Raw materials apart, there are other issues related to Corus, which Tata Steel has to look into, he said. However, he maintained that the company had not paid a higher price for the target company.

He said, "We did not reach the cut-off level that we had set for ourselves." Responding to queries, he said, the strength of the steel market at present justified the price it paid for Corus. Tata Steel paid 608 p per share for Corus, higher than the the first offer of 455p per share, which was perceived to be high by analysts and investors.

Corus to be delisted

Anglo-Dutch steel giant Corus will be delisted from the stock exchanges and become a subsidiary of Tata Steel next month after its shareholders approve the latter's takeover proposal. Tata Sons Chairman Ratan Tata, who would also head the European company after the transaction is completed, today said an integration committee would be formed to oversee the merger of the newly-acquired company.

After meeting Corus Chairman James Leng in here, Tata said the committee would comprise representatives from Corus and Tata Steel. He said Corus shareholders would consider Tata Steel's $11.3 billion offer to acquire Corus at an extraordinary general meeting on March 7. Once the shareholders approve the proposal, Corus would be delisted from the stock exchanges and would function as a subsidiary of Tata Steel from April, Tata said.