Corus Group
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| Corus Group plc | |
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| Type | Private |
|---|---|
| Founded | British Steel plc 1984; Koninklijke Hoogovens N.V. 1918; Merger of British Steel & Koninklijke Hoogovens 1999 |
| Headquarters |  London, England |
| Key people | Philippe Varin, CEO |
| Industry | Steel |
| Products | Steel |
| Revenue | £10,142 million (2005) |
| Operating income | £680 million (2005) |
| Net income | £451 million (2005) |
| Employees | 50,000 |
| Website | www.corusgroup.com |
Corus Group plc, normally referred to simply as Corus, is one of the world's largest producers of steel, headquartered in London. It was formed from the merger of Koninklijke Hoogovens N.V. with British Steel Plc on 6 October 1999 and is currently in the process of being taken over by India's Tata Steel
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 three divisions. These are:
- Strip Products Division,
- Long Products Division,
- Distribution and Building Systems Division
Corus also had an Aluminium Division that was 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, Trostre, 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 and the UK triathalon team.
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[edit] Takeover bids
On January 30, 2007, Tata Steel, part of India's Tata Group, has purchased 100% stake in the Corus Group at 608 p. per share in an all cash deal, cumulatively valued at (USD 12.04 Billion).
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.[1]
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 10 2006, Tata preemptively upped the offer to 500 pence (the “Revised Tata Acquisition”). Other than the increased offer price, the Revised Tata Acquisition was subject to the same terms and conditions as set out in the original offer.
On December 11 2006, CSN announced a formal offer for the Company at an offer price of 515 pence per Corus Share (the “CSN Acquisition”), valuing the deal at $ 9.6 Billion.. The CSN Acquisition would also be implemented by way of a scheme of arrangement and is subject to a pre-condition that either Corus Shareholders reject the Tata Scheme or the Tata Scheme is otherwise withdrawn by Corus or lapses. The Corus board promptly recommended both the revised offers to its shareholders.
On December 19 2006, Corus announced the following:
In the light of the competing offers for Corus by Tata Steel UK Limited (“Tata”) and CSN Acquisitions Limited (“CSN”), the Company announced on 12 December 2006 that the Corus Directors intended to propose resolutions to shareholders at each of the reconvened EGM and Court Meeting to be held on 20 December 2006 to adjourn those meetings. The Company also stated that it would announce a proposed date for those adjourned meetings in due course.
Also on December 19 2006, UK Watchdog 'The Panel on Takeover and Mergers' announced that the last date for each of Tata and CSN to announce revised offers for the Company, should they wish to do so, is 30 January 2007. They also warned that it would begin an auction procedure if the two remained in competition.[2]
January 31, 2007, Following the lack of agreement on an offer, the previously mentioned auction process was triggered. Following the conclusion of the auction process (at an unprecendented length of nine rounds) conducted by the Panel in accordance with Rule 32.5 of the Code (the "Auction"), Tata Steel announced the proposed acquisition of Corus Group at 608p per share, that being 5p more than CSN's top offer of 603p. The £6.7 billion deal will include £500 million of debt. [1].
The Corus Group board recommended the acquisition to their shareholders later the same day. Thus it is expected that pending the satisfying of a number of factors, including timetable requirements set by the court, that the deal will be decided on by Corus Shareholders in mid-March 2007 [2].
[edit] British Steel
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. [3] 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
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.
[edit] See also
[edit] References
- ^ Ryan, Jennifer. "Tata Debt for Corus Leaves Derivative Trades in Lurch", Bloomberg, 25 October 2006. Retrieved on October 25, 2006.
- ^ http://news.bbc.co.uk/2/hi/business/6193913.stm
