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Corus bid could be imminent

Speculation is rife among industry watchdogs that a bid for Anglo-Dutch company Corus could be imminent.

The Indian-owned global company, Mittal Steel, which is now emerging as the world’s largest single producer is favourite to make a play for the UK’s only bulk steel producer.

An industry source said: “There is a take-over mania in the industry at present. Mittal’s prime target is the Franco-Belgian steel giant, Arcelor, which is one of the world’s top three steel makers. If it succeeds, it will be responsible for 10% of global steel production.

“But its £14 billion bid could well be blocked by politicians. The rumours are very strong among workers in the UK that if the European Union stops the move, it will then make a bid for Corus.”

While a merger between Arcelor and Mittal Steel has been suggested in some quarters, the two companies which are numbers two and four in the world by market capitalisation carry considerable clout.

The source added: “Corus is very small and I don’t know if it can survive in the industry long term. If giant companies produce large economies of scale, it will be squeezed out of the export market. It’s all about bulking to make greater profits and if anything Corus is shrinking.”

Corus has also been the subject of speculation over a possible move by ThyssenKrupp. The company denied reports in a German magazine suggesting it was interested in buying Corus, but did feature it on an internal list of companies it could buy in 2004.

While the feeling is that Corus may no longer be master of its own destiny, this is not a view shared by the company itself.

Corus head of media communications Ananya Sarin said: “Rather than seeing ourselves as a potential target, we have made expansion part of our strategy and are looking at investment opportunities inside and outside western Europe.

“As well as a £153 million investment in Holland, £130 million is being spent to install new capacity and capabilities in Scunthorpe in the UK. We are continually evaluating new opportunities.”

But the Mittal Steel bid for Arcelor will be made public in two to three weeks time. If this is blocked by the European Union, the feeling among analysts is that Corus will then become its number one target.

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