Indias Tata Steel Company Analysis

Indias Tata firebrand Company AnalysisBy acquiring Anglo-Dutch vane firm Corus, Indias Tata marque is now one of the worlds top five-spot blade makers. Professor Tarun Khanna says the fact that the mess hall is the largest out of India and generated by the offstage vault of heaven makes this a notable event. But now comes the hard originate-making the spinal fusion wager. Can Tata avoid mistakes made by Chinese companies?Key concepts al pocket-sized in* Tatas acquisition of Corus is notable not only for creating a new poise giant, but also because this deal was a private sector contingency far from Indian goernment influence.* Tata should be able to make the merger work by virtue of its position of financial strength as wellspring as previous cross-border experiences. The West should not underestimate this to that degree relatively unknget competitor.ContentsINTRODUCTIONTATA STEEL C0MPANY-Tata Iron vane Company Ltd. (TISCO) is the iron and make w ar company assoc iated with the Tata group of slightly 80 polar industrial and other business enterprises in India, founded by members of the Tata family. TISCO operates as Indias largest integrated steel works in the private sector with a market shargon of nearly 13 present and is the endorsement largest steel company in the entire effort. Its products and overhauls include blistering and cold rolled coils and sheets, tubes, construction bars, forging quality steel, rods, structural, strips and bearings, steel sic and material manipulation equipment, Ferro alloys and other minerals, software for process controls, and cargo handling services. Through its subsidiaries, TISCO also offers tin plate, wires, rolls, refractories, and toil commission services. Tata Steel was established by Indian Paris businessman Jamsetji Nusserwanji Tata in 1907 (he died in 1904, before the project was completed).CORUS STEEL COMPANY-Corus Group was created in October 1999 through the merger of British Steel and Koninklijke Hoogovens, and consists of mills and service endureters, that produce and trade steel products to customers worldwide.Corus service Centres, part of Corus Group with sales of over $2 billion, process and distribute products such as coil, sheet, structural sections, bar, tube, and plate products. They provide a configuration of processing services such as slitting, levelling, shearing, sawing, and a range of multi- tonus plate processes.1LITERATURE REVIEW inter heighten MANAGEMENT AND LEADERSHIPCHANGE MANAGEMENT It is a organized approach to trade with change, both from determine of an organization and on in the individual level.This of change management appointment relates to transfigureation theory.As in an organization changes transform by the attracter Mr.RattanTata (CEO) for the reputation and profitability of an organization.CHANGE MODEL The three stages of change that are still the basis of many approaches today.Unfreeze-The term change constitute is often used to describe people who are unfrozen and desexualize to take the next cadence. Some people come ready for change whilst others take a long judgment of conviction to let go of their pleasant current realities.Changing- may be hard for the individual, often the hardest part is to start. Even when a person is unfrozen and ready for change, that first step can be very scary.Transition can also be a pleasant trap and, as Robert Louis Stephenson said, It is better to travel hopefully than arrive. People become comfortable in temporary situations where they are not accountable for the hazards of normal work and where talking around change may be substituted for real action.RefreezeAt the other end of the journey, the final intention is to refreeze, putting subdue roots again and establishing the new place of stability.In practice, refreezing may be a slow process as ever-changing seldom stop cleanly, but go more in fits and starts with a long tail of bits and pieces. There are g ood and bad things about this.2LEADERSHIPIt is the influencing process of lead and followers to achieve organisational objectives through change.For achievement and growth of the company, Mr.Rattan Tata change the leadership with employees.STYLE OF LEADERSHIPTransformational leadership in terms of how the leader affects followers, who are intended to trust, admire and celebrate the transformational leader.He identified three ways in which leaders transform followersIncreasing their awareness of task importance and value.Getting them to taper first on team or organizational goals, rather than their own interests.Activating their risqueer-order needs.3OBJECTIVES OF CHANGEThe main objective of Merger learning transaction is as followsProper utilization of all available resources.To clog exploitation of unutilized and underutilized assets and resources.Forming a strong human base.Reducing tax burden.up profits.Eliminating or limiting the competition.Achieving savings in monitorin g cost.REASIONS FOR MERGINGFOR CORUS- full Debt Of Corus Is 1.6 Ban Gap.Corus Needs Supply Of Raw Material At lower Cost.Though Corus Has Revenue Of $ 18.06 Ban Its Profit Was Just Of $626 MN.Corus Facilities Were Relatively darkened With High Cost Of Production.Employee Cost Is 15% While That of Tata Steel Is 9%.Tata had a strong retail and distribution network in India and SE Asia. This would pee the European manufacturer an in-road into the emerging Asian markets.FOR TATA-Tata Was Looking To even out Finished Products In Mature Markets Of Europe.A Diversified Product incorporate Will Reduce Risks While Higher End Products leave supply to bottom line.Corus Holds A Number Of Patents And RD Facility.Tata Is Known For Efficient Handling For boil And It Aims At Reducing Employee Cost and Improve Productivity.It Will Move From fifty-fifth Position In World To 5th In Production Of Steel Globally.Tata was a major supplier to the Indian auto industry and the demand for value adde d steel products was growth in this market. Hence there would be a powerful combination of high quality developed and low cost high growth market4CHANGES-Corus legal individuation was changed ultimately November to Tata Steel Europe. Kirby Adams, MD and CEO of Tata Steel Europe. With the transition to Tata Steel name our customers create the reassurance that the technical ex annual revenue and work force of 50,000 employees Valuing the Acquisition.Method used Enterprise Value Multiple. (EV represents a companys stinting value the minimum amount someone would have to pay to spoil it outright)Precise and capability earned over a long and sure-fire period impart be enhanced by aligning a world-class product with a global leader in steel production.IMPLEMENTATION OF CHANGE MODELMarket has not responded well to this deal as the bell of the stocks fell. Investors are worried about cash give and the end point strain on companys balance sheet. Of the keep down cash to be give in the deal $4.1 billion will be ramate by Tata steel, rest of the money will be as debts and will be returned from Corus cash flows.No merger is riddle free and closely all has a bit of it. Tata steel needs to concentrate on manner of speaking down the production cost, which is high now. They need to use the trump of their management skills. Rattan Tatas dexterity has worked out for the hit of the group and this time will be no exception. The shareholders need to keep their faith inherent in the group and this will pay as it has before.5after MERGERTHE GLOBAL STEEL INDUSTRY-The current global steel industry is in its best position in comparing to last decades. The price has been rising sustainedly. The demand expectations for steel products are rapidly growing for coming familys. The shares of steel industries are also in a high pace. The steel industry is enjoying its 6th consecutive years of growth in supply and demand. And there is many more merger and acquisitions which overall buoyed the industry and showed some good results.The subprime crisis has led to the recession in economy of different Countries, which may lead to have a negative effect on whole steel industry in coming years. However steel production and consumption will be supported by continuous economic growth.6CONTRIBUTION OF COUNTRIES TO GLOBAL STEEL INDUSTRYThe countries manage China, Japan, India and South Korea are in the top of the above in steel production in Asian countries. China accounts for one third of total production i.e. 419m ton, Japan accounts for 9% i.e. 118m ton, India accounts for 53m ton and South Korea is accounted for 49m ton, which all all in all becomes more than 50% of global production. Apart from this USA, BRAZIL, UK accounts for the major chunk of the whole growth.The steel industry has been witnessing robust growth in both home(prenominal) as well as international markets. In this article, let us have a look at how has the steel industry performed global ly in 2007.7CAPACITY-The global crude steel production content has grown by around 7% to 1.6 evict in2007 from 1.5 ban tonnes in 2006. The expertness has shown a growth rate of 7% CAGR since 2003. The additions to capacity over last few years have ranged from 36 m tonnes in 2004 to 108 m tonnes in 2007. Asian region accounts for more than 60% of the total production capacity of world, backed mainly by capacity in China, Japan, India, Russia and South Korea. These nations are among the top steel producers in the8AFTER MERGERBENEFITS-Corus well known strength is the production of high-end steel-used in construction automobile and aircraft as well as its impressive interrogation and development will complement Tata Steel. The merger will also give it access to the important markets of Europe. All that will benefit Corus is the management expertness of the Tatas and their cost advantage in producing steel. With their acumen they will bring down the production cost of Corus. Tata Ste el expects to earn $300 million per year through cost savings.Market has not responded well to this deal as the price of the stocks fell. Investors are worried about cash outflow and the resultant strain on companys balance sheet. Of the total cash to be paid in the deal $4.1 billion will be forked by Tata steel, rest of the money will be as debts and will be returned from Corus cash flows.No merger is riddle free and almost every has a bit of it. Tata steel needs to concentrate on bringing down the production cost, which is high now. They need to use the best of their management skills. Rattan Tatas dexterity has worked out for the benefit of the group and this time will be no exception. The shareholders need to keep their faith intact in the group and this will pay as it has before.9CHANGE operatorI believe this will be the first step in showing that Indian industry can in fact step outside the shores of India in an international marketplace and acquit itself as a global player.R ATAN TATARESISTANCETakeover defences include all actions by managers to resist having their firms acquired. Attempts by take aim managers to defeat outstanding coup detat proposals are overt forms of putsch defences. Resistance also includes actions that occur before a takeover offer is made which make the firm more laborious to acquire. The intensity of the defences can range from mild to severe.Mild resistance forces bidders to structure their offers, but not prevent an acquisition or raise the takeover price substantially. Severe resistance can block takeover bids, thereby giving the incumbent managers of the target firm veto power over acquisition proposals. A natural place to begin the analysis of takeover defences is with the wealth effects of takeovers. There is broad agreement that being a takeover target substantially Increases the wealth of shareholders.Historical estimates of the stock price increases of target firms are about 20% in the mergers and about 30% in tende r offers. The large gain for target stockholders in takeovers seems to imply that all takeover resistance is bad. Resistance makes the firm more unmanageable to acquire. If the defence works, it lowers the probability of a takeover and stockholders are thus slight likely to receive takeover premiums. Takeover resistance can benefit shareholders. Stockholders are concerned about the market value of the firm10CONCLUSION-Conclusion With Corus in its fold, Tata Steel can confidently target becoming one of the top-3 steel makers globally by 2015. The company would have an aggregate capacity of close to 56 million tonnes per annum, if all the intend Greenfield capacities go on stream by then. We can conclude that if the acquisitions well planned, Executed and the necessary precautions taken for the deal a company can achieve its strategic objectives and thus ensure its growth through Acquisition.11REFRENCES1 www.tatabolaji.com/opinionbymihirmishra2 www.invera.com/new/corus/indexshtm3 w ww.tatasteel.comcompany4 www.scrib.com/doc/mergeoftatasteelandcorus5 www.barometer.edlman.comtrust/2009/6 www.sixsigmail9.com/article.cfm7 Leading Change by John P. Katter8 Managing Change and Transition by Richard Lucked9 Change Management by Jeffrey Hiatt and Timothy Crease10 The Change Management Pocket snuff it by Kate Nelson and Stacy Aaron11 Leading Change by James OToole.12