Tata Steel Acquiring Natsteel

The Tata Iron and Steel Company Ltd., headquartered in India, has signed definitive agreements with Singapore-based NatSteel Ltd. to acquire all of NatSteel's steel business for cash subject to regulatory approvals.

NatSteel will spin off its entire steel business into a wholly owned subsidiary, NatSteel Asia Pte Ltd ("NatSteel Asia") subsequent to which Tata Steel will acquire 100 percent of the equity interest in NatSteel Asia.

NatSteel owns steel mills in China, Thailand, Vietnam, the Philippines and Australia. The business is focused on long products and has a cumulative capacity to produce about 2 million tons per year of rebars, wire rods, pre-stressed concrete wires and strands.

The acquisition also includes a 26 percent equity interest owned by NatSteel in Southern Steel Berhad, a 1.3 million ton steelmaker in Malaysia. The transaction is expected to close by the end of the year.

According to published reports, Tata may be able to reduce its raw material costs by using billets at the NatSteel facilities instead of ferrous scrap.

Commenting on the transaction, B. Muthuraman, Managing Director, Tata Steel said, "The acquisition of the steel business of NatSteel is an important step in Tata Steel's plans to build a global business. NatSteel's business provides Tata Steel access to key Asian steel markets including China. I believe that the acquisition will prove to be a good strategic fit and create value for Tata Steel shareholders. I welcome members of NatSteel's management team and all employees to the Tata Steel family."

Mr. Oo Soon Hee, President of NatSteel, said, "With this transaction, NatSteel Asia will be well-positioned to weather the volatilities in the steel industry because it will be part of a much larger, fully integrated steel group with extensive resources. As part of Tata Steel, NatSteel Asia will be able to benefit from a much larger footprint in the steel industry as well as have access to significant resources, enabling us to further expand within Asia."