Corus & CSN merger prospects

Corus & CSN merger prospects

The possibility of a merge of Corus, the Anglo-Dutch steelmaker previously formed by merger of British Steel and Hoogovens with the Brazilian Companhia Siderurgica Nacional (CSN) is being pronounced lately in the market. CSN is known to be a low cost producer which is believed to strengthen Corus operations. On the other hand some speculations were raised with regard to the company's debt situation as well as on its large shareholder the Vicunha Group is reported to be unwilling to release its 46.5% shares. The merger rose fears of further job cuts in the UK as last year 11,000 workers were laid off and currently there are 39.000 employees under Corus both in the UK and the Netherlands whereas Brazilian workers of CSN are paid substantially less and CSN produces slab steel at less than $50/ton than European average as per UBS Warburg estimates. The news comes as no surprise as Corus was known to be looking to end its three years of losses however ISTC general secretary Michael Leahy comments they would keep reminding the company that this should not cost the UK workers their jobs. Corus lately sold its Finnish steel producer AvestaPolarit for £350 million and is in process of selling its Dutch aluminium division which would bring £1 billion which are believed to reduce its debt down to £ 300 million. This merge is seen for CSN a way to bypass the US import quotas. The company is currently exporting 1.25 million tons slab steel, which is the half tonnage of the Brazil quota.