London/New Delhi: Three of the top 10 global steel companies are set to fall into the hands of Indians with the Tata group making an indicative offer of £4.1 billion ($7.6 billion) to take over the Anglo-Dutch firm Corus.
This is also the latest salvo by the 138-year-old Tata group - among the top business houses in India with 96 companies in its empire - to spread its wings across the globe in all its seven areas of operations.
A merger of Corus with Tata Steel will create the sixth largest steel producer in the world and would amount to the biggest takeover of a foreign firm by an Indian company, analysts said, adding the deal made sense for both companies.
"I can't see anyone who would have as much to offer Corus as Tata," said John Quigley, editor of industry publication Steelweek, adding that the deal would give Tatas access to western markets and Corus a source of low-cost steel.
"There are not many opportunities for producers in emerging low-cost markets to gain access to the markets of Europe other than by acquiring a company like Corus," Quigley added.
The Anglo-Dutch company is currently ranked the ninth largest steel producer in the world while Tata is ranked 56th and the merger will more than and quadruple their sales to $23 billion.
Corus has 24,000 employees in Britain and 16,000 in Holland, and the only worry is over the retention of workforce. Community, the association of British steel workers, wanted guarantees from Tatas on employment, pay and pensions.
"I want Tata to pledge to maintain the existing Corus workforce in Yorkshire and elsewhere and to work with the steel union - Community," Denis MacShane, MP from Rotherham, wrote to Prime Minister Tony Blair.
He also wanted the Indian steel maker to uphold wages and protect pension rights of existing and retired Corus employees.
Corus said talks were on with Tata Steel, even as industry experts felt the bid price may have to be revised upward as some European and Russian steel makers may join the race for Corus.
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Analysts in India also maintain that while there will be no direct impact on the Indian steel industry if the takeover goes through, it will definitely act as a benchmark for similar consolidations by other Indian companies.
At present, Lakshmi Nivas Mittal is the undisputed king of steel manufacturing with his Mittal Steel being the world's largest manufacturer of the commodity, followed by Arcelor, which he took over earlier this year.
"The Tatas will definitely stand to gain as they can extend their footprint to yet another region," said Anand Rathi of the New Delhi-based corporate advisory group and securities firm - Rathi and Rathi Associates.
"This shows the aspiration of the Tatas to globalise, banking on being a low-cost steel maker. This will also lead other steel firms to follow suit," said corporate and financial analyst Sanjay Bansal, who runs Ambit Finance.
In fact, for Tata Steel also, this will be the third takeover of a steel company abroad - having acquired Millennium Steel of Thailand and Singapore-based NatSteel for $553 million to gain access in the Asia Pacific region.
The other companies in the Tata group are estimated to have some $2 billion in overseas acquisitions in the past year, according to Tata officials.
Some acquisitions by its group firms include Korea's Daewoo Commercial Vehicles, the US-based Energy Brands Inc, also known as Glaceau, South African Tea major, Joekels, Good Earth of the US, Pearl Grouop of Britain, and Tyco of the US.
"Tata Steel has set ambitious goals for itself and geared towards establishing itself amongst the ranks of the top t10 global steel producers in the coming decade," says the company's Web site.
"Given the scorching pace Tata Steel has set for itself, more stunning moves on the mergers and acquisitions front can definitely be expected."
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