CSN of Brazil Tops Tata Bid for Corus

Brazilian steelmaker CSN raised the stakes in the bidding war for Britain's Corus Group PLC on Monday, topping a sweetened offer by Tata Steel of India.

Companhia Siderurgica Nacional's offer of 515 pence ($10.00) per share, valuing Corus at 4.9 billion pounds ($9.6 billion), was accepted by Corus' board, the companies said.

Corus earlier agreed to an offer of 500 pence ($9.78) per share from Tata Steel, which had raised its original bid of 455 pence ($8.90) per share in hopes of closing out the rival bid.

Shares in Corus, the world's eighth-largest steel producer, jumped 4.9 percent to 524.25 pence ($10.22) on the prospect of an accelerating bidding war. Tata said it was considering its position.

Corus' stock has soared more than 80 percent this year on takeover speculation. A takeover by either company would create the world's fifth-largest steel company.

Commerzbank analyst Jutta Rosenbaum said the cost savings advantage rests with CSN, but upping the offer is ambitious and expensive.

Rosenbaum added that a combination with Tata has long-term advantages but requires large capital expenditure.

Corus Chairman Jim Leng, who late Sunday backed the revised Tata offer, on Monday approved the CSN bid.

"It is ... consistent with our strategic objective of securing access to raw materials, low-cost production and growth markets," said Leng. "The combination of the two businesses will create a strong platform from which to compete and grow in an increasingly global market."

The proposed deal would create a company with output of 24 million tons of steel per year. It would also give Corus access to high-quality, low-cost iron ore from CSN's Casa de Pedra mine in Brazil as well fast-growing markets in South America.

"The strategic impetus for this combination is growth -- growth in Brazil, in Europe and for our combined work forces," said CSN Chairman and Chief Executive Benjamin Steinbruch.

Corus, which employs 47,300 people worldwide, has been searching for a business partner for a year.

It has been under pressure to link with a low-cost rival, and has said it would make sense to find a partner with assets in countries such as Brazil, India and Russia, as rising raw material and energy costs in the Britain and the Netherlands chip away at profits.

The fight for Corus extends consolidation in the steel industry, following the summer acquisition of Arcelor SA by Lakshmi Mittal's Mittal Steel Co. to create a global powerhouse with output of more than 110 million tons of steel a year.