1. Tata- Corus
P&G-Gillete

2.  Sep 20, 06 : CORUS uses the strategy to work with low cost producer.
 Oct 06, 06 : Initial offer by TATA is considered to be too low.
 Oct 17, 06: TATA kept its offer to 455 pence per share.
 Oct 20, 06 : CORUS accepts the offer of £4.3 billion.
 Oct 23, 06 : Brazilian Steel Group CSN counter-offer to TATA’s offer.
 Oct 27, 06 : CORUS criticized by JCB for acceptance of TATA’s offer.
 Nov 18, 06 : The CSN approaches Corus With an offer of 475 pence
per share
 Nov 27, 06 : Board of Corus decides to give more time for
shareholders to decide whether it issue forward a formal offer.
 Dec h18,06 : Tata increases its original bid for Corus 500 pence per
share, then CSN made its counter bid at 515 pence per share in cash
 Jan 31, 07 : Tata ad agreed to offer Corus investors 608 pence per
share in cash
 Apr 02, 07 : Tata steel manages to win acquisition to CSN and has the
full voting support from Corus shareholders

3.  TATA Acquired CORUS on 2nd April 2007 which is 4 times larger than its
size.
 The deal price was $ 12 Billion.
 TATA Steel,the winner of the auction for CORUS declares a bid of 608
Pence per share.
 In 2005 when the deal was started the price per share was 455 pence.
 TATA Surpassed the final bid from Brazilian steel maker ‘COMPANHIA
SIDERURGICA NACIONAL’ (CSN) of 603 pence per share.
 The combined entity has become the world’s fifth largest steelmaker
after the deal.
 For this deal TATA has finance only 4 Billion $ from internal company
resources.
 TATA Have secured funding commitments from its advisors.
 These advisors were Deutshe bank, ABN Amro and Standard Chartered.

4. FOR TATA
The initial motive behind the deal was not CORUS
revenue size but rather its market value.
To compete on global scale because then TATA
was just at 56th rank in steel production.
CORUS holds a number of Patents and R & D
facility.
 Acquiring Corus will give Tata access to European
customers of steel.
Acquisition cost will be lower then setting up new
green field plants and marketing channel.

5. To extend its Global reach through TATA.
To get access to Indian Ore reserves, as well as
virgin market for steel.
To get access to low cost materials.
Total Debt of Corus was GBP 1.6bn
Saturated market of Europe.
Better facilities and lower cost of production
Employee cost was 15 % (TATA- 9%)
Profit margin was 3.4% (TATA- 17%)

6. ..

7.  Biggest merger in the history of Consumer
goods
 P&G acquired Gillette for $57b to become the
world’s largest consumer goods company
 Annual Sales of the combined entity:$60.7b
 After purchase of Gillette P&G will have $21b
brands with market cap of $200b
 P&G paid .975$/share(20% premium),later
buyback of shares worth $18-22b over 12-18
months

8.  Merging companies: similarity in Corporate
history
 Merger based on a different model where
innovation was the focus rather than the
scale
 Regulatory concerns: Product overlaps
 Consumer goods after 1980s

9.  P&G strength: Women’s personal care products
 Gillette strength: Men’s grooming category
 Complementary in strength cultures and vision to
create potential for superior sustainable growth
 Gillette stock climbed 50% since 2003,profits jumped
on premium products
 Acquisition added about 20% to P&G sales, long term
sales growth estimate to 5-7% a year
 Operating margin expected to grow by 25 % by 2015
from 19% in 2003
 The companies expected cost savings of $14-16 bn
from combining back-room operations and new
growth opportunities.

10.  more resources to enable intensive collaborative
supply chain initiatives in a more cost-effective way.
 merger would also bring down the advertising and
media costs owing to greater bargaining power
 Opportunities in developing markets: Gillette would
give exposure to P&G in emerging economies like
India and Brazil, while P&G would distribute Gillette
products in China
 It will give P&G the much needed boost to further
strengthen its product categories where at present it
has negligible presence
 The deal will help Gillette in improving its inventory
days.

11.  The merger would result in around 6,000 job cuts,
equivalent to 4% of the two companies' combined
workforce of 140,000. Most of the downsizing will take
place to eliminate management overlaps and
consolidation of business support functions.
 Cultural problems absence because of geographical
proximity
 P&G is considered a promote-from-within company, and
already had a lot of executive talent at the top. Therefore,
absorbing Gillette's management to their satisfaction
could be difficult
 P&G's ability to handle this massive cultural assimilation
would decide the success or failure of this acquisition.
 Overlaps of some brands