Corus mulls forging Brazilian link

STEEL group Corus is considering a tie-up with its Brazilian counterpart Companhia Siderurgica Nacional. The Anglo-Dutch group, which houses what was once British Steel, said the deal would involve issuing its own stock.

Corus shares closed at 85 1/4p on Thursday, valuing the business at £2.66bn. Shares in CSN, Brazil's largest steel producer, have risen sharply this week on speculation of a deal with Corus. It has a market value of around £850m.

Corus said any deal would need the 'consent of several parties and would be subject to a number of conditions...There can, therefore, be no assurance that current discussions will result in any transaction between the parties.'

There has been speculation that Corus was in talks Vicunha, the Brazilian group that controls CSN. Reports in Brazil earlier this week also said Corus was negotiating a joint venture with CSN. Pundits say any deal is unlikely to include Corus taking full control. One stumbling block is Vicunha's $600m ($412m) debt with Brazil's Development Bank, for which its controlling share in CSN is surety.

Corus was formed in October 1999 through the merger of British Steel and Koninklijke Hoogovens. It has shed thousands of British workers over the past couple of years, hit by soft markets.