Corus Group

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Corus Group plc

Type of Company	Public (LSE: CS, Euronext: CORS, NYSE: CGA)
Founded	British Steel plc 1984; Koninklijke Hoogovens N.V. 1918; Merger of British Steel & Koninklijke Hoogovens 1999
Headquarters	London, United Kingdom
Key people	Philippe Varin, CEO
Industry	Steel
Products	Steel Aluminium
Revenue	£10.142 Billion (Y.E. 31 December 2005)
Employees	50,000
Website	corusgroup.com

Corus Group plc, normally referred to simply as Corus, is one of the world's largest producers of steel and aluminium, headquartered in London, United Kingdom. It was formed from the merger of Koninklijke Hoogovens N.V. with British Steel Plc on 6 October 1999 and is currently being acquired by Tata Steel, an Indian steel company ^[1]. It is listed on the London Stock Exchange (where it is a constituent of the FTSE 100 Index), Euronext Amsterdam and the New York Stock Exchange.

Corus has been structured into four divisions. These are:

Strip Products Division,
Long Products Division,
Distribution and Building Systems Division,
Aluminium Division. (Sold in March, 2006)

It has major integrated steel plants at Port Talbot in South Wales; Scunthorpe, North Lincolnshire; Teesside, Cleveland (all in United Kingdom) and IJmuiden, the Netherlands. It also has steel plants situated at Shotton, North Wales Rotherham and Stocksbridge, South Yorkshire, England and Motherwell, North Lanarkshire, Scotland. Group turnover for the year to 31 December 2005 was £10.142 Billion. Profits were £580 million before tax and £451 million after tax.

On 16 March 2006 Corus announced that it had signed a letter of intent to sell its aluminium rolled products and extrusions businesses to Aleris International Inc for £570m. Corus would retain its smelting operations and supply Aleris under a long-term agreement.

Corus is the sponsor of the Corus chess tournament in the Netherlands.

Following the merger of Arcelor and Mittal Steel there is continued speculation that Corus will be part of the next round of consolidation in the global steel industry, likely partners cited include Tata Steel, Severstal, Everaz and Thyssen Krupp.

1 Takeover bids
2 British Steel
3 Koninklijke Hoogovens
4 References

[edit] Takeover bids

On October 20, 2006, Tata Steel, part of India's Tata Group, announced that it had agreed to pick up a 100% stake in the Corus Group at 455 p. per share in an all cash deal, cumulatively valued at GBP 4.3 Billion (USD 8.04 Billion). Some analysts expected this move to spark a takeover war, especially from Russian and other European steel makers in the near future. However, with no other major rival bid, Corus formally accepted the takeover deal by Tata^[2]^[3].

Tata surprised the credit default swap segment of the derivative markets by deciding to raise $6.17bn of debt for the deal through a new subsidiary of Corus called 'Tata Steel UK', rather than by raising the debt itself. Tata's security credit rating is investment grade, whereas the new subsidiary may not be. The higher risk associated with raising debt through a subsidiary with a lower credit rating prompted Fitch Ratings to downgrade its rating of the credit swap risks in the takeover to 'negative'. Fitch also stated that Corus' responsibility for the debt may lead to Corus' own unsecured debt rating being downgraded. This does not affect the rating of bonds issued by Corus which are secured debt.^[4]

On November 19 2006, the Brazillian steel company CSN launched a counter offer 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 CSN offer of 515 pence per share, valuing the deal at $ 9.6 Billion. The Corus board promptly recommended both the revised offers to its shareholders.

[edit] British Steel

Main article: British Steel

British Steel company logo (1966-)

British Steel was a large British steel producer, consisting of the assets of former private companies which had been nationalised on July 28, 1967 by the Labour Party government of Harold Wilson.

In 1971 British Steel sponsored Sir Chay Blyth in his record-making non-stop circumnavigation against the winds and currents, known as 'The Impossible Voyage'. In 1992, they sponsored the British Steel Challenge, the first of a series of 'wrong way' races for amateur crews.

The British Steel Act 1988 was passed by the Conservative government of Margaret Thatcher to privatise British Steel. This was achieved on 5 December 1988.

It merged with the Dutch steel producer Koninklijke Hoogovens to form Corus Group on 6 October 1999. [1] at the time forming the third largest producer of steel behind Posco of South Korea and Nippon Steel of Japan. British Steel, with job cuts of about 12,000 in the pipeline formed about two-thirds of the merged group.

[edit] Koninklijke Hoogovens

Main article: Koninklijke Hoogovens

Koninklijke Hoogovens was a Dutch steel producer founded in 1918. It was located in IJmuiden. This plant is now part of the Anglo-Dutch Corus Group steel company.

AMX companies of the Netherlands
Aalberts Industries • ASM International • Koninklijke BAM Groep • Boskalis • Corio • Corus Group • Crucell • CSM • Fugro • Heijmans • Hunter Douglas • LogicaCMG • Nutreco • Océ • Ordina • Pharming Group • Randstad Holding • Stork • Univar • USG People • Van der Moolen • VastNed Retail • Vopak • Wereldhave • Wessanen