Corus to be good fit for Tata: Steel Business Briefing

07 October 2006

Patrick Flockhart, managing director, Steel Business Briefing, believes that Corus would be a good fit for Tata Steel. He adds the Corus-Tata synergies would be good distribution, management and R&D, if the deal happens.

Again, assuming that the Corus-Tata deal does take place, he says the combine would have better pricing power and would be able to produce about 22 million tones per annum of steel. CNBC-TV18 shares with domain-b its s exclusive interview with Flockhart:

How have you in the international media read the news of Tata Steel actually going out and acquiring Corus? What do you see as synergies for the two?
First of all, I would say that Tata has not confirmed that it is definitely making an offer. It has only confirmed that it is considering an offer on Corus, as it is considering potentially doing other things.

There is no secret that Corus is definitely seeking a partner. Corus, though being three-four times bigger than Tata Steel, doesn't regard itself as big enough to exist in this new world of steel on its own.

So it is seeking partners and there is no secret that Tata Steel backed by the Tata Group, is definitely planning to be a worldwide player in steel. So I think there is a good chance that Tata may well make an offer for Corus.

In terms of synergies, I guess by acquiring Corus, Tata would acquire extremely good management and there would be R&D synergies as well. Also, Corus has got extremely good distribution, not only in the European Union, but also worldwide.