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Rediff.com  » Business » India Inc hails Tata's Corus takeover

India Inc hails Tata's Corus takeover

Source: PTI
Last updated on: January 31, 2007 14:11 IST
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India Inc on Wednesday welcomed Tata Steel's acquisition of Anglo-Dutch steel maker Corus while expressing concern that the deal might re-rate the entire steel industry, making steel companies over-valued.

Jindal Steel and Power Ltd cice-chairman and managing director Naveen Jindal said, "This is not an attractive price but, if the Tatas have liquidity it will be a good investment in the long run."

He said the Tatas were a professional lot and the deal would be a success. Some industry barons also expressed concern that the deal may lead to over-valuation in the global steel sector.

"The price paid is expensive...all steel companies may get re-rated now but its a good deal for the industry," Jindal South West Steel Managing Director Sajjan Jindal said.

Despite the apprehension, the industry is optimistic that the deal would further enhance India's standing in the global scenario with the world's largest and the fifth largest steel manufacturers having roots here.

"Tata Steel will be in the big league of top five steel producers. The deal takes India's might to the world," Jindal Stainless Director N C Mathur said. 

Describing the acquisition as the "big bang" of the Indian corporate world, Ficci Secretary General Amit Mitra said it marked the beginning of conversion of India's dream of becoming the third largest economy in the 21st century into a reality.

"We must congratulate Ratan Tata for this achievement for he has shown the financial muscle power at a global benchmark and also on the tremendous negotiating skills against odds," he added. Mitra said Tata's successful bid for Corus has reposed faith in India's manufaturing sector.

"Already, $10 billion worth of mergers and acquisition have taken place in various sectors such as pharma and IT, but it has not been demonstrated in the manufacturing sector," he said, adding if India had to sustain the current levels of growth then the manufacturing sector also had to grow and the takeover would be the beginning of it.

Industry chamber CII also expressed optimism about the deal and said it shows that Indian companies are coming of age and are taking mergers and acquisitions of India Inc to a new paradigm.

"Tata Steel's successful bid for Corus Group Plc is a statement of Indian industry's coming of age and takes our M and A levels to a different paradigm," Chamber's president R Seshasayee said in a statement.

The deal would ensure due respect to emerging Indian companies in the global arena, he added. Industry body Assocham said, Tatas have earned for themselves a great name and brought large laurels to the Indian industry, which is already on the spree of acquiring global brands not only in the steel sector, but also in other sectors of key economic activities.

"A good precedent has been established, which will send ample positive signals that by 2010 Indian industry would have created 250 MNCs," Venugopal N Dhoot said.

Reacting on the deal, the PHD Chamber of Commerce and Industry said the Tatas are the first major Indian company to acquire a global giant like Corus.

"The deal shows that Indian business is present not only on the peripherals but is a part of the global world," PHDCCI Secretary General Krishan Kalra said.

The Tata-Corus saga

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