Tata Steel: The Acquisition of Corus

In 2007, when Tata Steel (Tata) bought the Anglo-Dutch steel maker, Corus Group plc (Corus), it was a moment of great promise for India’s growing steel industry. At almost 10 times the size of Tata, Corus was a company of enormous scale. The importance of that scale was reflected in Tata’s need to raise the price of its original offer by a premium of 34 per cent. Tata’s aim was to become a formidable force in the world steel industry. It stood to gain global market exposure, research and development, and technology, while Corus stood to gain cheap raw materials and access to emerging economies. However, negative indicators and market concerns by analysts eventually proved true on March 30, 2016, when Tata announced its decision to sell some units of its U.K. operations. When Brexit occurred in June 2016, confusion grew and Tata’s plans for a future sale of U.K. assets seemed in jeopardy. The removal of the chairman of Tata further added to the woes of Tata Steel Europe. How would the new leadership, after a major failure, bring about changes toward a better future?

This case is suitable for post-graduate management and leadership development programs in the following courses: strategic management, organizational behaviour, entrepreneurship, business communication, mergers and acquisitions, and negotiation. After completing the case, students should be able to<br><ul><li>examine how the winner’s curse and hubris may act as potential barriers in an acquisition and how to overcome them;</li><li>analyze the importance of the external environment on a business entity’s performance in an acquisition;</li><li>discuss the importance of creating a shared vision and cultural integration as vital factors during an acquisition;</li><li>understand the position of the acquiring firm and the target firm during the pre- and post-acquisition stages; and</li><li>discuss how to manage an organization’s failure and change its business strategy to turn the company around.</li></ul>

• Challenges in International Acquisition, Winner's Curse, Shared Vision, Global Expansion Strategy, Strategic Integration