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Brazil's fourth largest steelmaker CSN's jump into the bidding war for the UK's Corus has upped the ante for Tata Steel. CSN's bid, valued at $8.4 billion, tops Tata Steel's by about four per cent. The move by CSN doesn't come as a surprise as the two entities were examining the possibility of a merger in 2002. However, unlike Tata Steel, which did a thorough due diligence before finalising the bid, for CSN, the business rationale and deal specifics are yet to be spelt out in greater detail. Unlike the Tatas, who sailed through the regulatory process, CSN may find the going tough, as there is an overlap in geographies and products serviced by Corus and CSN. Seeking the approval of the pension trustees is also likely to pose a big challenge for CSN, which is a hurdle the Tatas have crossed. Of Corus' two pension schemes, the Tatas have agreed to make up the deficit in the smaller scheme, and increase contributions to the larger one for three years.

Radhika Kamath

More Stories on : Mergers & Acquisitions | Steel | The Big Deal | Tata Steel Ltd

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