LITERATURE REVIEW

EFFECTIVENESS OF MERGERS
Earlier we quoted some research on the development of companies that merged particularly
conglomerate or unrelated mergers. At this point, let us think about whether a merger or
acquisition is an effective strategy. There is to consider four perspectives, namely those of
shareholders, executives, employees and society. In general, the Company and the
aforementioned shareholders lose because earnings growth compared to when the two
separate companies to sink tends passed "growth rates. The shareholders of the acquired
company can win in the short term, if their stock is driven up and sell them it at high prices.
The target company executives tend to win, because the salaries are usually correlates with
the size of the company. The acquired company executives usually suffer the disadvantage
that they lose status, authority, and often their jobs. Sometimes the acquired company's
Executive profits if the acquirer seeks certain executives for their experience, or if a return
EXISTS, ie, are in exchange for "friendliness" in the acquisition of certain executives of the
acquired company "worried." But employees of the acquired companies usually lose in.
"Friendly" takeover. The results for the acquired unrelated company (friendly or unfriendly)
depend van for this reason and how the acquisition of company structures, the acquisition. If
it remains autonomous, the acquired company may be better off if its performance was
lagging and it is replaced by an inflow of capital.
If the new management reorganized or brings new management employees can lose company
usually loses because with a lower rate of return to be created less employment opportunities
antitrust legislation also too much concentration of economic and political power to prevent
is, which can cause higher Prices or less variety in the products and services offered.
Can mergers ever be a benefit?
Yes. As already mentioned, does not cause any mergers to dire conditions If the acquired
company is worth saving is (is effective, but from lack of financial support will fail Can save
fusion. For example, a company could be a great product or a service, but financial expertise
or other ability is lacking, and a bank can not or will not make it. an acquisition of companies
required resources could provide. and can create some mergers specialized companies that are

productive more and. some studies concludes that companies which, because their yields
were low at the time about, and therefore was taken, the shareholders of the takeover were
should be carried over. can benefit low returns incompetent management and shareholders
can be recycled by names . gain This is the argument used by grasshoppers. Yet many
companies fail to earn. Banks and venture capital companies can usually help if a company is
profitable.
Hermann provides an explanation for why conglomerate and no conglomerate may vary postmerger profitability. He examined in 96 companies used acquisitions criteria. While both
types of businesses were good returns, were the major differences that conglomerate Acquirer
existing manager, wanted to continue, and they were more interested in the reduction of
earnings risk than earnings growth per se. However proposes a large number of studies have
shown that diversification does not reduce systematic risk, and to spread the risk better by
individual shareholders as can be done by the companies. In sum, we believe that it compared
significant disadvantages for mergers as with internal approaches for expansion or
diversification related. We are two other studies you cite to support this conclusion.
Gutman studied 150 companies in the period 1954-1958. The 53 companies whose growth
rate was twice as fast as the growth of GNP in this time acted as:
1) They selected industries whose sales grew faster than the growth of the economy as a
whole.
2) They chose the sub-sectors and sub-segments within each industry, which grew faster
than the industry and focused not on these sectors on the entire industry.
3) They entered the subsectors earlier than competing companies.
4) More than 80 percent of growth companies introduced new products to existing
customers.
5) More than 40 percent introduced new products for new customers. Only about 7
percent of attempts existing products to sell new customers.
6) Two-thirds of growth companies sell their products outside the United States.
7) Those whose growth includes mergers have outperformed not those which grew
entirely by internal methods.
Recognizing that these operate in favorable economic climate companies let's look at Clifford
study. Clifford studied more than 1,800 companies 1970-1975 in 32 different industries.
During the 1974-1975 recession, he drew top performers as a company whose earnings per
share increased by 33 percent compared to the average, while earnings per share of other
companies declined annually by 23 percent. What were the main features of this company?

1) They focused relentlessly on the limitation of financial risks by maintaining price

discipline which they achieved by
a rate of inflation.
b reducing the response time to changes in price.
c pricing value.
2) They emphasized cost discipline maintain margins.
3) They stressed financial control of balance sheet items.
4) They stressed product discipline
a exploiting winner and always the loser.
b redesign products.
c raising the hurdle. for margins on new product entry
5) She stayed by close to their market niche
a building on the strength of its core product lines.
b avoid excessive diversification.
c Search specialized niches for opportunity.
The main feature of the losers in this time was that they diversified aggressively developed
pay little attention to the markets or on the complex structures. Many fail mergers because of
the following "Seven Sins", which seem to be committed by these acquisitions too often:
1) Paying too much
2) a boom market will not crash Assuming
3) Leaping before looking
4) stray too far a field
5) When swallowed a little too big
stay 6) Marrying different corporate cultures / 7) counting on leaders

Company Profile of TATA STEEL LTD.

Tata Steel has in its line some of the world's most advanced and respected entities - the Tata
Group itself, British Steel, Koninklijke Hoogovens and Natsteel. What holds each member of
the global family Tata Steel is a common corporate culture, marked by value-based
guidelines, which are every business decision is based.

About Tata Steel

Established in 1907 as Asia's first integrated private sector steel company, Tata Steel Group is
among the top ten global steel companies with an annual crude steel capacity of more than 29
million tons per year. It is now the world's second geographically diversified steel producer
with operations in 26 countries and a commercial presence in more than 50 countries. The
Tata Steel Group, with a turnover of Rs. 1, 48,614 crores in FY 14, has more than 80,000
employees on five continents and is a Fortune 500 company.
Tata Steel larger production include those. In India, the UK, the Netherlands, Thailand,
Singapore, China and Australia Operating companies in the group include Tata Steel Limited
(India), Tata Steel Europe Limited (formerly Corus), Tata Steel and Tata Steel Thailand
Singapore.
The Tata Steel Group's vision is to the steel industry benchmark in "Value Creation" and
"Corporate Citizenship" his world through the excellence of its people, its innovative
approach and overall behavior. Underpinning this vision is committed to a performance
culture aspiration targets, safety and social responsibility, continuous improvement, openness
and transparency.
In 2013, Tata Steel India was the first integrated steel plant in the world, outside of Japan,
around the Deming Application Prize 2013 awarded for exceptional performance in Total
Quality Management. In 2012, Tata Steel was the first integrated steel company in the world,
outside of Japan, the Deming Grand Prize 2012 launched by the Japanese Association of
Scientists and Engineers to win.
Indian operations
Tata Steel established India's first industrial city, now Jamshedpur, where India's first
integrated steel plant in 1907. The Jamshedpur established works currently comprises of a 9.7
million tonnes per year of crude steel production plant and a plurality of finishing mills.

Two new greenfield steel projects are planned in the states of Jharkhand and Chhattisgarh.
Kalinganagar project is underway, it will increase the production capacity by 3 MnTPA in the
first phase.
Mines and coal mines in India give the company a distinct advantage in the procurement of
raw materials. Iron ore mines are located both in Noamundi (Jharkhand) and Joda (Odisha)
within a distance of 150 km from Jamshedpur. The captive coal mines of the Company are
located at Jharia and West Bokaro (Jharkhand).

European Operations
Tata Steel Europe (formerly Corus) a crude steel production capacity of 18 million tons per
year. Tata Steel Europe has production sites in Western Europe, plants in the UK, the
Netherlands, Germany, France and Belgium, supported by a sophisticated global network of
sales offices and service centers.
Website: www.tatasteeleurope.com
Southeast Asian operations
Tata Steel started its activity in SEA in 2009 with investments in NatSteel Singapore
(Singapore Tata Steel) and Millennium Steel (Tata Steel Thailand).
With over 40 years of steelmaking experience, Tata Steel Singapore one of the most
prominent steelmakers in the Asia-Pacific region. It is aimed at the growing construction
industry through its manufacturing presence in Singapore, Thailand, China, Malaysia, the
Philippines and Australia.
Tata Steel Thailand is the largest producer of long steel products in Thailand.
Vision: diversity enriches every large organization and improving its collective skills. A clear,
shared vision is an important prerequisite for a successful diversity management
Our vision is the global steel industry benchmark for value and to be corporate citizenship.
We will achieve our vision by:
Our employees: to promote through cooperation, to promote talent, improving leadership
and act with speed, pride and passion.

 Our offer: to be with the supplier of choice, delivering quality products and services and the
creation of added value for our customers.
Our innovative approach: to develop with the top solutions in technology, processes and
products.
Our behavior: Through a secure job offer, the protection of the environment, to demonstrate
care and high ethical standards for our communities.
HISTORY OF TATA STEEL LTD.
Established in 1907, Tata Steel, the flagship of Tata Group is the first integrated steel plant in
Asia and is now the second largest world`s geographically diversified steel producer and a
Fortune 500 company. Supported by 100 glorious years of experience in steel making, Tata
Steel is the world? S 6th largest steel company with an existing crude steel production
capacity of 30 million tonnes per annum (MTPA). Tata Steel has a balanced global presence
in more than 50 developed European and fast-growing Asian markets, with manufacturing
facilities in 26 countries.
It was the vision of the founder; Jamsetji Nusserwanji Tata that on 27 February 1908, the first
pile was driven into the ground by Sakchi. His vision helped Tata Steel more periods of
adversity to overcome and try to improve against all odds.
Tata Steel`s Jamshedpur (India) Works has a crude steel production capacity of 6.8 MTPA,
the proposed by Jharkhand, Orissa and Chhattisgarh in the States Steel Greenfield Projects
three has planned, in India by the year 2010. The Company to 10 MTPA to increase, with an
additional capacity of 23 MTPA and a greenfield project in Vietnam.
By investing in Corus, Millennium Steel (renamed Tata Steel Thailand) and NatSteel
Holdings, Singapore, Tata Steel has created a production and marketing network in Europe,
Southeast Asia and the Pacific Rim. Corus, which generated more than 20 MTPA of steel in
2013, has offices in the UK, the Netherlands, Germany, France, Norway and Belgium.
Tata Steel Thailand is the largest producer of long steel products in Thailand, with a
production capacity of 1.7 MTPA. Tata Steel has proposed a 0.5 MTPA mini blast furnace
project in Thailand. NatSteel Holdings produces about 2 MTPA of steel products through its
regional activities in seven countries.

Tata Steel, the joint venture with Tata BlueScope Steel Limited, also in the steel building and
construction applications market.
The iron ore mines and coal mines in India give the company a distinct advantage in the
procurement of raw materials. Tata Steel also strives toward securing raw materials through
joint ventures in Thailand, Australia, Mozambique, Ivory Coast (West Africa) and Oman. Tata
Steel has an agreement with Steel Authority of India Limited signed to establish for coal
mining in India a 50:50 joint venture company. Tata Steel also has bought 19.9% stake in
New Millennium Capital Corporation, Canada iron ore.
Exploring ways in titanium dioxide business in Tamil Nadu, ferrochrome plant in South
Africa and the establishment of a deep water port in coastal Orissa are an integral part of the
growth and globalization objective of Tata Steel.
Tata Steel India is the first integrated steel company in the world, outside of Japan, in 2013
the Deming Application Prize Award in Total Quality Management Excellence.
Company's businesses:
Storage Division: Manufactures ball bearings, double row self-aligning bearing, magnetic
bearing, release bearing and tapered roller bearings for bicycles, fans, water pumps, etc.
Ferroalloys and Minerals Division: Operates chrome mines and has to make units for
ferrochrome and ferromanganese. It is one of the largest players in the global ferrochrome
market.
Agrico Division: Tata Agrico is the first organized producer in India of hand tools and
implements for use in agriculture.
Tata Growth Shop (TGS): designed, developed, manufactured, built and thousands of tons
of equipment commissioned by overhead cranes to high precision components up, including a
rocket launcher for the Indian Space Research Organisation and.
Tubes Division: The largest steel pipe manufacturer with the largest market share in India, it
aims to strengthen its market presence by modernizing and expanding trade and Przisrohr
production capacity.

 Wire Division: A pioneer in the production of steel wires in India, it produces coated and
uncoated wires, branded Tata Wiron. The Division also operates a wholly owned subsidiary
in Sri Lanka.
Joint ventures and associated companies:
Corus
- Europe's second largest steel producer with operations in the UK and mainland Europe
Tinplate Company of India Limited (TCIL)
Tayo Rolls Limited
Tata Ryerson Limited (Tryl)
Tata Refractories Limited (TRL)
Tata Sponge Iron Limited (TSIL)
Tata Metaliks
Tata Pigments Limited
Jamshedpur Injection Powder Limited (Jamipol)
TM International Logistics Limited (TMILL)
limited mjunction services
TRF Limited
Jamshedpur Utility and Service Company Limited (JUSCO)
The Indian Steel and Wire Products Limited (ISWP)
Tata BlueScope Steel Limited
Dhamra Port Company, Orissa
Hooghly Met Coke & Power Company
Lanka Special Steel Co., Ltd.

 Sila Eastern Company Limited

NatSteel Holdings (NSH)
Tata Steel Thailand
Tata Steel KZN- South Africa
Tata NYK: A joint venture with Nippon Yusen
Kabushiki Kaisha
Success / recognition:
2014 Tata Steel received the prestigious BML Munjal Award Tata Steel with the renowned
Indian MAKE Award conferred in 2013
granted 2013 Tata Steel Core Supplier Status by PSA Peugeot Citron CII-ITC Sustainability
Award 2012 for Tata Steel
2012- Mr. B Muthuraman conferred with Padma Bhushan Award Tata Steel Tops List of 50 of
India's most admired companies Tata Steel bags National Safety Awards for two mines Tata
Steel wins Deming Grand Prize 2012
2011 Tata Steel wins 'The Business Respected Company Award 2011'
Tata Steel bags two prestigious awards at the MMMM Exhibition 2011
TSRDS Jharia receives Best NGO Award Tata Steel with ABCI Awards presented
Tata Steel Stall bags first prize in "Heavy Industry" category at Udyog Mela-2011 Ranchi,
March 17th 2011
Tata Steel has won `The Business World Most Respected Company Award 2011? in the
Metals category.
received 2010 Tata Steel proud 6. 'INDIAN MAKE' Award
Tata Steel receives National Energy Conservation Award 2010

Tata Steel employees of the Prime Minister's Shram Awards for 2010-12 world awarded
'gives Tata Steel, the S & H Recognition of Excellence Award 2010 CSR Excellence Award to
Tata Steel
Tata Steel received two awards as part of the? Rashtriya Khel Protsahan Puraskar? for his
remarkable contribution over several decades in the field of sport in the year, 2014.
Tata Steel India awarded the Deming Application Prize 2013 for excellence in Total Quality
Management. It is the first integrated steel company in the world outside Japan to receive this
award.
World Steel Dynamics has the best steel producer in the world Tata Steel on place (for two
consecutive years) in its annual list in February 2011th
Tata Steel has been awarded five times the prime minister of India Trophy for the best
integrated steel plant. It has become Asia's Most Admired Knowledge Enterprise Award five
times in 2008, awarded in 2009, 2011, 2012 and, 2013.
the prestigious Global Business Coalition Award for Business Excellence in the Community
in recognition of his pioneering work in the field of HIV / AIDS awareness.
Tata Steel Works was awarded the prestigious social responsibility (SA) 8000 Certification
by social. Accountability International (SAI), USA. It is the first steel company in the world
to receive this certificate.
Sustainability Report Tata Steel celebrated by the United Nations Environment Programme
(UNEP) and Standard and Poor as the strongest, submitted by each company's house from the
emerging markets.
Best Company Award 2011 regulated for setting high standards in governance practices.
Tata Steel won 'Award for Corporate Social Responsibility in Public Health "of US Indian
Business Council (USIBC), Population Services International (PSI) and the Center for
Strategic and International Studies (CSIS) in 2012 Design.
Company profile CORUS LTD.
Corus Group Limited manufactures, processes and distributes steel products in Europe and at
international level. It operates in three divisions: Strip Products, Long Products and

Distribution and Building Systems. The Strip Products Division provides hot steel strips
rolled and cold rolled and metallic coated steel products; Lightweight steel for packaging and
non-packaging applications coated; pre-finished steel; plated precision strip products with
special finishes; and electrical steel and transformer cores. The Long Products Division
provides plates, sections, wire rods and steel semi-finished products; Railway products and
services; Special profiles and engineering services; Engineering stick, straight and chilled
bars and turned dragged or rolled earthing bar and hot narrow strip; Steel pipes, hollow
sections and line pipe and pipeline project management services; and plate and flower
products. Distribution and Building Systems Division provides steel and aluminum building
systems; Product and service solutions for projects and trade; and consulting, technology,
training and operational support for steel and aluminum industries. The company supplies
construction, automotive, packaging, mechanical and electrical engineering, aerospace,
shipbuilding, railway, energy, metal products, and oil and gas markets. The company was
founded in 1988 and in London, UK based manufacturing facilities in the UK, the
Netherlands, Germany, France, Norway and Belgium. Corus Group Limited operates as a
subsidiary of Tata Steel Europe Limited.

Hide Detailed Description

30 Millbank
London, SW1P 4WY
Great Britain
Founded in 1988
Phone:
44 20 7717 4444
Fax:
44 20 7717 4455
Key Executives for Corus Group Limited
Mr. Aarnout A. Loudon

executive
Age: 78
Mr Briet Franswillem W.
managing Director
Mr. Nicholas Goodison
managing Director
Age: 80
Mr. Bryan Kaye Sanderson CBE
Other profession
Age: 73
Compensation from the financial year, 2015.

History of Corus Group plc

Corus Group plc, one of the largest steel companies in Europe, was born in 1999 with the
merger of British Steel plc and Dutch steel producer Koninklijke Nederlandsche Hoogovens
en Staalfabrieken NV. The company manufactures, processes and distributes metal products
in the construction, automotive, mechanical engineering, packaging and other markets especially in Europe. The majority of its production in the UK, but it also has a presence in
the Netherlands, Germany, France, Belgium, the United States and Canada. include the
company's products are coated and uncoated steel strip products, profiles and sheets, pipes,
special steels, wire rod, stainless steel and carbon steel products. Corus also operates a
significant aluminum business; However, from the beginning of 2002 the company plans to
expand its aluminum-related units for sale.
Early History and Development
The company is the successor, by the state British Steel Corporation (BSC), the leading
private steel companies, which survived the Depression of the 1920s and 1930s and the

Second World War. Under the Labour government from 1945 to 1951, first those businesses
from the large compensation payments they benefited for the renunciation of its coal mining
interests to the state obtained and then were even nationalized, on the grounds that they
formed to limit an oligopoly with the performance, to prevent to raise prices, and technical
progress. The Iron and Steel Corporation of Great Britain in 1950 was established as the State
holding company for their shares, but the steel masters retained the initiative, especially by a
boycott organized by the British Iron and Steel Federation (BISF), the trade association of the
industry, which it controls.
suspended in the autumn of 1951, a new Conservative government that the company's
operations after eight months mostly ineffective existence. Between 1953 and 1963 Iron and
Steel Holding and Realisation Agency sold out 16 of 17 nationalized companies, especially to
the former shareholders. At the same time, an iron steel board, was the negative forces of the
fixing of maximum prices for products in the UK and the approval or rejection of an
investment of more than 100,000. Price control was nothing new, a more modest scale in
1932 to have begun by the 1950s, with the result that losses at the low points of the economic
cycle could not be offset by higher profits in better times. The company capital spending
strengthened, and the Iron and Steel Board - or rather the taxpayers who funded it - was the
main source of new investment funds.
In the 1950s and 1960s the British steel industry lost its historical advantages of cheap coal
and abundant iron ore, the basic raw materials of industry. Coal prices rose by 134 percent
from 1950 to 1967, and the domestic iron ore industry was in favor of ore neglected from
new fields abroad. Rearmament from 1950 on, the company created to keep old plants,
instead of investing in expensive new equipment to keep in the attempt with demand.
Between 1945 and 1960, total production of crude steel in the UK has doubled in volume,
which caused an increase to a large extent on such technical innovations as oxygen-based
production and continuous casting. The claim that the industry had now been through the
events of 1958 and 1959, when the Conservative Prime Minister, Harold Macmillan, not
sanctioned the only extra strip mill was industry, but two, one denied in Llanwern in Wales
have been taken out of politics and another in Ravenscraig in Scotland, both subsidized by
public funds and operate neither able at full capacity.
However, the British steel industry problems were not all. by the government or the company
It faced new rivals, especially in Japan, as well as old, were protected in France, Germany,

Belgium and Luxembourg, which are now of the European Coal and Steel Community and
some of which were blessed company with deep-water ports in high-quality ores. Moreover, a
general decline in the growth rate of world demand for steel there from about 1960 to the
world's leading prices and profits for the steel industry is declining to a scramble excess
output disposed at the lowest sustainable prices and a global steel glut that until 1969 the
British industry in particular took further by a cautious attitude in the 1920s and never shaken
off and by the refusal of the individual companies are marked learned to cooperate with each
other something that could threaten their own identity. The steel industry has been made
faced the 1960s with a fragmented structure based on investment decisions, which, apart from
the construction of the mill Ravenscraig, had in the 1930s.
Renationalisation under Labour in the mid-1960s
In 1964, the Labour Party office returned with a commitment to new steel nationalize. The
BISF answer was the report Benson, came to the conclusion that the industry needs to go all
the oxygen process to build in much larger systems additional capacity to site them near the
coasts (for deliveries of raw materials), and 65 shedding percent of the existing plant area and
100,000 workers. These proposals gave the government new ammunition because, despite the
demands of companies that could provide most of the necessary funds from their falling
profits, it was clear that the industry alone could not hope to finance these developments. The
nationalized British Steel Corporation (BSC) began operations on July 28, 1967, just when
new orders were in five years at the lowest level, and in a period of mergers among
companies in France, Germany and Japan. At its inception BSC was the second largest steel
company in the non-Communist world, equipped with the assets of 14 crude steel companies
whose output exceeded 475,000 tons. It employs 268,500 people and included Richard
Thomas & Baldwin, a company that had been state-owned since 1951st
BSC faced some daunting problems. First, because compensation to the former owners based
on market values, and not - as in the private mergers and acquisitions - to the net assets or
future profitability, shareholders in excess of 350 million more than the assets were worth.
A later Conservative government recognized the loss of BSC and wrote that the amount of
their debt in 1972. In addition, from which fell 14 companies ROCE of 15 percent in 1956 to
3.7 percent, making them unable make, execute the Benson plan they had commissioned, and
the sad state of their assets was tied BSC profitability for some time to come, not damaging.
In addition, 10 percent of the production of crude steel and about 30 percent of finished steel

production remained in the private sector, BSC leave with the generally less profitable mass
steel and lower quality finished steel business. Since private companies were subsidized
effectively sold through the controls on BSC price of crude steel in them, they could focus
resources on technological advances that allow greater productivity, it about one-third of the
market for finished steel, enter with only a quarter of the total capacity,