Travelling Soldier

Tata Steel’s successful move,$8bn offer, to acquire its much bigger rival Corus Group is the latest in a series of takeovers abroad executed by India’s largest and one of the oldest corporate groups.

The acquisitions have meant that 30 per cent of the group’s revenues today come from overseas operations.

Following are the major acquisitions by Tata Group companies in the past few years:.

• Tata Tea acquires 30% in US’ Glaceau (Energy Brands) in August 2006 for $677 million..
• Tata Tea buys 33 per cent in South African tea company Joekels through its subsidiary Tetley Group.
• Tata Tea acquires US-based Eight’O clock coffee company for $220 million (Rs 1,050 cr) in June 2006.
• Tata Chemicals picks 63.5% in UK’s Brunner Mond Group for Rs 508 crore in December 2005.
• Tata Steel acquires Millennium Steel of Thailand in December 2005 for $404 million (Rs 1,800 crore).
• TCS buys out Chilean BPO firm Comicorn for $23 million (Rs 107.02 crore) in November 2005.
• TCS acquires Sydney-based FNS in October 2005.
• Tata Technologies purchases INCAT International, UK in October 2005 for $91 million (Rs 411 crore).
• Tata Tea acquires Good Earth Corp in October 2005 for around $32 million.
• Tata Auto Comp (TACO) takes over German auto components maker Wundsch Weidinger.
• VSNL acquires Teleglobe International in July 2005 for $239 million.
• Tata Steel buys Singapore’s NatSteel in August 2004 for over Rs 1,300 crore.
• VSNL takes over Tyco Global Network for $150 million (Rs 690 crore)
• Tata Chemical acquires Moroccan company Indo-Maroc Phosphore for Rs 166 crore
• Tata Motors picks 21% stake in Spain’s Hispano Carrocera for Rs 70 crore
• Tata Tea buys Tetley, UK in February 2000 for Rs 1,870 crore
• Tata Motors takes over Daewoo Commercial Vehicle Company of Korea in March 2004 for Rs 459 crore

In the biggest overseas acquisition attempt by an Indian company, Tata Steel today said it was willing to offer $7.64 billion (around Rs 34,500 crore) in cash for buying Corus, which is UK’s largest steel company.

The “indicative, non-binding offer” to acquire 100% stake in Corus at 455 pence a share came exactly 12 days after Tata Steel had announced its interest in the foreign steel company. The offer which came through a “recommendary route” has put the enterprise value of Corus at $10 billion, Tata Steel said in a notice to stock exchanges.

A look at Tatas financials

Tata Steel can back its “non-binding” $7.6 billion offer for Corus with Rs 40,000 crore ($8.84 billion) worth of reserves that the group companies have on their books as on March 31, 2006.

Even if it raises the offer by another 15-20% and the cash outgo goes up to $8.8-$9.1 billion, the group has the financial muscle to handle it as it generates cash flow of over Rs 13,000 crore (close to $3 billion) every year. The collective market capitalisation of the Tata group’s listed companies is now over Rs 2,00,000 crore (about $45 billion).

Tata Sons, the holding company of the group alone has reserves of Rs 9,000 crore ($2 billion). It also holds 80% stake in the group’s IT flagship TCS, currently valued at Rs 80,000 crore (about $17.7 billion).

Tata Steel, which is eyeing Corus, has Rs 9,200 crore (over $2 billiion) worth reserves in its accounts. The company also generates cash flow of over Rs 4,000 crore ($900 million) every year.

The other group companies that have high reserves are TCS (Rs 5,560 crore/$1.2 billion), Tata Motors (Rs 5,128 crore/ over $1.1 billion), Tata Power (Rs 4,782 crore/over $1 billion), Tata Chemicals (Rs 1,953 crore/over $400 million), Indian Hotels (Rs 1,658 crore/about $375 million) and Tata Tea (Rs 1,083 crore/ over $220 million).

Google’s official blog was hacked over the weekend and a fake message left saying the company had decided to cancel a joint project with eBay. Google patched the bug by Sunday and removed the hacker’s message, but not before it went widely noticed causing confusion among Google observers.

The intrusion is the second time this year that the blog has fallen into others’ hands. In March, Google staffers deleted the Google Blog by mistake and someone briefly took control of the Web address.

In the most recent incident, someone used a bug in Blogger, the service the Google Blog uses, to break in. The resulting post was riddled with grammatical and spelling errors that said Google had ended its click-to-call advertising project with eBay because it was ‘monopolistic’.

The Google Blog, is one of the company’s main communication tools. As official corporate messages similar to press releases, its postings often trigger news reports, analyst recommendations, and investor decisions.

On Monday, Google announced the appointment of Dr Prasad Bhaarat Ram, who was previously the CTO of Yahoo India as the head of its R&D centre in Bangalore. Both the web giants have their R&D operations in Bangalore and are on the expansion mode.

Commenting on the move, Yahoo India R&D CEO Venkat Panchapakesan said, “Dr Prasad Ram has decided to move on from Yahoo India due to personal reasons. We value his contribution towards our organisation and wish him success.”

Google already has a head for its Bangalore R&D centre - Arvind Jain. A Google spokesperson said, “Arvind’s contribution to Google India R&D centre has been immense. Arvind will continue to play an important technical and leadership role both in Bangalore and for the rest of the company.” Both web portals have been on the expansion mode in their Bangalore R&D centres.

BB “band manager” and Searchblogger John Battelle was named one of the ten “Best Marketers in the Business” this week by Advertising Age magazine. John is also the founder of Federated Media, the firm that handles advertising for a slew of sites, including BB, Digg, MetaFilter, MAKE:, and 43Folders. Congrats, JBat!

“Talent management is not for sissies. You have to understand what it is to be an independent author making his living off of this. These are talented people living off fear and adrenaline.”

This is John Battelle, co-founder of Wired magazine, chronicler of Google and, most recently, a sort of Moses of the blogosphere, talking about what it’s like to lead that scattered nation of aggregators and instigators into a promised land of advertiser respect and, of course, higher CPMs…

“You need to be the kind of organization who knows how to keep those people happy and talk them off of ledges,” he said. “That is not for the weak of heart, and it’s not what traditional media companies are good at.”

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Njoy

GOOGLE is in talks to buy YouTube for an estimated $1.6 billion (£850 million) in a deal that would net the video website’s co-founders hundreds of millions of pounds.

The internet search company has a $10 billion war chest and is pursuing YouTube as it looks to build on its fledgeling Google Video business by acquiring the industry leader.

YouTube began as a site dedicated to video clips uploaded by its users. But last month it signed a deal with Warner Music that gives its users free access to songs and videos from its entire stable of artists, including Madonna and Green Day.

But Google would also inherit problems as well as benefits if it buys the company. Last month Doug Morris, the chief executive of Vivendi’s Universal Music Group, told his investors that “copyright infringers” such as YouTube and MySpace “owe us tens of millions of dollars”. Mr Morris was referring to the use of pop songs as background music in YouTube amateur videos as well as the Universal artists’ own productions on the website.

YouTube also faces competition from other video providers such as Microsoft, Yahoo! and MySpace, which all seek to win a share of this lucrative market.

Of the founders, Mr Hurley is now chief executive and Mr Chen is chief technology officer. Mr Karim has left the company.

The reason is simple: Carriers need the revenues. As mobile operators merge, produce less-expensive phones, build faster networks and, due to competition, charge less for voice service, the pressure on their bottom lines increases. They have to begin exploring new ways to generate revenue, and advertising-subsidized content is hard to overlook.

Informa estimates that worldwide advertising spending on mobile devices will rise from less than a billion this year to $11.35 billion in 2011.

Informa is also forecasting that there will be over 2.1 billion mobile subscribers worldwide by the end of 2006, rising to nearly four billion in 2011.