TATA STEEL ACQUIRES CORUS
(20 Oct 2006)

The boards of Tata Steel and Corus today announced their agreement on the terms of the recommended acquisition of Corus at a price of 455 pence in cash for each Corus Share, valuing the company at £4.3 billion. Tata Steel is India’s largest private sector steel company with 2005/06 revenues of US$5.0 billion and crude steel production of 5.3 million tonnes across India and South-East Asia. It is a vertically integrated manufacturer and is one of the world’s most profitable and value creating steel companies. This acquisition will make it the world's fifth largest steelmaker.

Tata Sons, Tata Steel and other Tata companies had combined revenues in 2005/06 of approximately US$22 billion. Tata Sons’ current investments are valued at approximately US$50 billion. Corus is Europe's’s second largest steel producer with revenues in 2005 of £9.2 billion and crude steel production of 18.2 million tonnes, primarily in the UK and the Netherlands. The combination is strategically compelling, creating a vertically integrated global steel group with the key features:

• fifth largest global steel producer with pro forma crude steel production of 23.5 million tonnes in 2005
• high quality, low cost, attractive growth platform in Asia combined with a leading European steel player
• high value-added product mix and strong market positions in automotive, construction and packaging
• a more resilient business model and a strong platform for further growth
• a strong and committed combined management team
• a common business culture and shared values

The price of 455 pence per Corus Share represents a premium of approximately 26.2% to the average closing mid-market price of 360.5 pence per Corus Share for the twelve months ended 4 October 2006, being the last business day prior to the announcement by Tata Steel that it was evaluating various opportunities including Corus.

Tata Steel has also held constructive and satisfactory discussions with Corus’ two main UK pension schemes and has offered to fund upfront the deficit on the Corus Engineering Steels Pension Scheme by paying £126 million into the scheme and to increase the contribution rate on the British Steel Pension Scheme from 10%. to 12% until 31 March 2009.

Commenting on today’s announcement, Ratan Tata, Chairman of Tata Steel, said: "This proposed acquisition represents a defining moment for Tata Steel and is entirely consistent with our strategy of growth through international expansion. Corus and Tata Steel are companies with long, proud histories. We have compatible cultures of commitment to stakeholders and complementary strengths in technology, efficiency, product mix and geographical spread. Together we will be even better equipped to remain at the leading edge of the fast changing steel industry."

Jim Leng, Chairman of Corus, said: "This offer from Tata Steel reflects the substantial value created for Corus shareholders since the placing and open offer and launch of our "Restoring Success"programme in 2003.

In the middle of last year, my board agreed a strategic way forward for Corus to seek access to low cost production and high growth markets. Consistent with this, the Company held talks with a number of parties from Brazil, Russia and India. This transaction represents the culmination of these talks.

This combination with Tata, for Corus shareholders and employees alike, represents the right partner at the right time at the right price and on the right terms. This creates a well balanced company, strategically well placed to compete in an increasingly competitive global environment."