So far, the focus of debate over possible rival bidders for Corus has settled on Severstal and Novolipetsk, two of Russia’s biggest steelmakers.
But also tipped to make a counterbid is CSN, the Brazilian integrated steelmaker with which Corus has twice been involved in talks over a possible merger – in 2002 and again earlier this year.
CSN has already joined other Brazilian steelmakers, such as Gerdau, in expanding overseas. It has owned a steel processing plant in Indiana, US, since 2001 and this year completed the purchase of Lusosider of Portugal from Corus. It is in talks with Wheeling-Pittsburgh, a US integrated steelmaker, although any deal faces stiff opposition from Wheeling’s shareholders. It also plans to invest $6bn to triple production in Brazil and on further overseas expansion.
CSN, which has capacity to produce 5.8m tonnes of steel a year, has a market capitalisation of about R$18bn ($8.4bn).
Like Tata’s, any offer from CSN would inevitably include a substantial proportion in equity. But with deal prices inflated by the current wave of consolidation – analysts say the group would be hard pushed to rival Tata’s £5.1bn ($9.5bn) bid for Corus.
All the same, CSN should not be written off. It is led by Benjamin Steinbruch, a talented and at times ambitious dealmaker who used his family’s textiles business to leverage his purchase of CSN at privatisation in 1993. He then surprised the industry by leading a consortium that bought Companhia Vale do Rio Doce, the world’s biggest exporter of iron ore, for $3.1bn at privatisation in 1997, although this turned out to be a deal too far and Mr Steinbruch sold his CVRD stake three years later.