Indian company flexes its buying power

Kyle James Oct 20, 2006


SCOTT JAGOW: We keep talking about the blistering pace of business growth in China and India. Today, we have iron-clad proof of that. An Indian steel company has agreed to buy a European rival called Corus for $8 billion. This would be the biggest takeover ever by an Indian company. Kyle James has more.

KYLE JAMES: India’s Tata Group is a diversified and respected company in Asia. Now its steel division is moving onto the global stage.

Last year, Tata was the world’s 56th biggest steel producer. If this gets final shareholder approval, it’ll be No. 5.

Analyst Tom Muller points to Mittal Steel’s merger with Arcelor earlier this year.

That move produced a mega-company that is dwarfing its competitors. If they want to stay in the game, he says, they have to gang up too.

TOM MULLER: And when they want to be an international player offering their products to international companies like in the car industry, they have to decide to make alliances or merger or whatever because they need the scale and regional plants to compete with Mittal Arcelor.

But the ink on the Corus deal isn’t dry yet. Muller says other steel makers could decide to launch hostile bids for the company.

In Berlin, I’m Kyle James for Marketplace.

We’re here to help you navigate this changed world and economy.

Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.

In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.

Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.