Tata expands Asia-Pacific steel business

India's Tata Iron and Steel Company Ltd. took a strategic step to expand its Asian footprint with the announcement Monday that it will buy the Asia-Pacific steel operations of Singapore's NatSteel Ltd.

The proposed deal involves Tata Steel taking over NatSteel Ltd.'s wholly-owned subsidiary, NatSteel Asia, for 486.4 million Singapore dollars (286.11 million US).

The transaction is expected to be completed by February 15, 2005.

When the deal is completed, Tata Steel will acquire NatSteel Asia's steel and related operations in China, Thailand, Vietnam, Malaysia, Indonesia, the Philippines and Australia.

NatSteel's Asia steel business, subsidiaries and assets in Singapore will be part of the transaction.

NatSteel Ltd. will retain its other businesses, which include chemicals, engineering, construction, property and investment.

Employees were informed of the deal just hours ahead of the announcement.

"It came as a shock to us, actually," a NatSteel employee told AFP.

Tata Steel Managing Director B. Muthuraman described the acquisition of NatSteel Asia as an "important step" in the company's plans to expand its business globally.

"NatSteel's steel business provides Tata Steel access to key Asian markets including China. I believe that the acquisition will prove to be a good strategic fit for Tata's steel business," he said in a statement issued in Singapore.

In Bombay, Muthuraman said that "the markets in South-East Asia in particular are growing and so we will look to expand operations."