India’s Tata Steel has announced that it has outbid rival Brazilian firm, Companhia Siderurgica Nacional CSN, to acquire UK/Dutch steel company Corus, itself created from the merger of British Steel and Hoogovens in 1999. The deal values Corus at GBP6.2bn, or 608p a share.

A UK-based takeover panel had launched an auction for the company to resolve competition between the two firms. Tata had originally offered 455p per share for Corus in October, or GBP4.1bn. The Corus board approved that bid but then he Brazilian firm offered a higher 475p per share in November. Tata raised its offer to 500p per share in December, a move that was trumped a day later by CSN offering 515p a share.

Tata has defended the fact that it has ended up paying more than two billion pounds more than it originally offered. According to the UK Guardian newspaper’s website, Ratan Tata, the chairman of the Tata Group, said that the deal represented a unique opportunity for the company. Tata’s shares fell by almost nine percent today amidst fears that the price is too high. According to the newspaper, B Muthuraman, Tata Steel‘s CEO, said the deal “may look expensive” but that within three years the integration of Corus would result in savings of US$350m (GBP179m) a year.

According to the BBC, Corus was the ninth-largest steel producer in the world in 2006, with 18.2m tonnes of output. Tata Steel ranked 56th with an output of 5.3m tones.

The Associated Press noted that the winning bid for Corus is more than what India received in foreign direct investment last year, and that the takeover shows that there is a radical change in international perception, especially among investment bankers, that Indian firms are creditworthy and that many have the potential to become global companies.