The merger will see the creation of the world's fifth largest steel company with crude steel output of more than 23m tonnes.
Corus says the link-up with a low-cost producer with access to raw materials will enable it to compete on a global scale. Tata says it will benefit from Corus's technical expertise in steels for construction, automotive and packaging.
No immediate change to Corus's operational structure has been announced. But Tata says: "In the longer term, the option to supply intermediate steel from India to the finishing facilities in the UK may offer further benefits."
Tata intends to retain Corus's existing management. CEO Philippe Varin will become deputy managing director of Tata Steel. Jim Leng, Corus's chairman will become deputy chairman if the deal goes through.
In order to sweeten the deal Tata has agreed to increase the contribution rate to the British Steel Pension scheme from 10% to 12% till 1st March 2009. This is significant as the deal requires a 75% approval by shareholders, many of whom are current and past employees of the company.
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