The Brazilian steelmaker agreed to buy the Anglo-Dutch rival for $9.6 billion in cash, trumping an offer agreed with Tata Steel.
Mark Potter and Devidutta Tripathy
LONDON/MUMBAI: Brazilian steelmaker CSN has agreed to buy the Anglo-Dutch rival Corus Group for 4.9 billion pounds ($9.6 billion) in cash, trumping an offer agreed only hours earlier with India's Tata Steel.
Companhia Siderurgica Nacional said on Monday it would pay 515 pence for each Corus share, beating Tata Steel's offer of 500p.
Corus shares leapt more than 5 percent to a new high of 527 pence on hopes the bid battle would yield an even higher offer.
“Because this is just a moderate increase you can't say this is a blowout bid by CSN,” said Kepler analyst Rochus Brauneiser.
Tata Steel, which kick-started the battle with a 455-pence-a-share offer, said it was considering its position.
A takeover of Corus by either CSN or Tata Steel will create the world's fifth biggest steelmaker and will be the latest in the industry as companies look for global reach, economies of scale and to secure valuable raw material supplies.
Earlier this year Dutch-based Mittal Steel bought Luxembourg's Arcelor to create Mittal Arcelor, the world's biggest steelmaker.
By 0915 GMT, Corus shares were up 4.9 percent at 524-14 pence in heavy trading, the biggest risers on the UK's benchmark FTSE 100 index.
Tata Steel shares were down 4.9 percent at 459 Indian rupees amid concerns it might overpay for Corus.
Analysts said CSN held the upper hand in the battle because it could extract more cost-savings from a deal.
This is partly because the Brazilian firm will be able to export its iron ore supplies to Corus's business in Europe.
“Clearly, CSN is able to realise more synergies than Tata,” said Rabobank analyst Richard Brakenhoff.
He said CSN was paying a high price for Corus compared with the value put on market-leader Arcelor Mittal and thought Tata Steel was unlikely to return with a higher bid.
CSN's bid values Corus at about 12 times 2007 earnings forecasts, according to Reuters Estimates.
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