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December 26, 2006 / Mridul

Why Tata Is Better Than CSN.

Amid the ongoing tussle between Tata Steel and CSN for the British steel giant Corus, the European Commission cleared Tata Steel’s acquisition plan. Although a mere formality, the approval comes as a bit of relief for the Tatas.

Over last few days Tata Stee’s offers for Corus have been consistently and successfully been chased down by the Brazilian steel maker. CSN’s latest offer being at 515 pence per share as compared to Tata’s offer of 500 pence per share.

With the aggressive bidding strategy adopted by CSN it just might have control over Corus which is one of the largest steel producing companies in the world. But i would still consider the Tatas as the better of the two.

Its in the name: The Tata group is one of the oldest industrial group in India. The shear name has been a symbol of trust and quality for the last one century. Tata has an established track record and it has proven good relations with its employees.

Diversification: Like Corus Group, Tata is also diversified. Its the diversification of Tata Steel which acts as its real strength. The Tata Group has presence in almost all the fast growing sectors in India and is a major & active participant in the rapidly growing Indian economy.

Good relations in government circles: This acts as a decisive factor in the growth of any company in India. If you want your company to succeed in a competitive market like India, where Red Tape runs through the system, you got to have someone influential by your side in order to achieve your goals and ambitions. The recent developments in Singur, West Bengal are the latest to show that Tatas have the ability and the resources to clear their way through the difficulties of the system.

CSN’s hunger for Corus is clearly evident from the fact that even though it is bending under heavy debts it is still aggressively matching Tata Steel’s offers. But Tata Steel has shown the much needed calm and composure throughout the bidding process.

All in all Tata Steel seems to be an obvious choice for the shareholders and the right match for Corus Group Plc.


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