NCERT Book Class 12 Business Studies Chapter 9 Financial Management

chapter

9
Financial Manage en
LEARNING OBJECTIVES When Ta a S eel cquired
oru
After studying this chapter, you
should be able to: Tata Steel, the biggest steel producer
in the Indian private sector acquired
Corus, a Dutch Steel Company in a
¾ explain the meaning of
deal worth 12 billion USD in 2007. A
business finance;
financial decision of this magnitude
has significant implicitness for both
¾ describe financial Tata Steel and Corus as well as their
management; employees and shareholders. Details
of acquisition are as follows:
¾ explain the role of financial
� This acquisition has been a largest
management in our
private sector transaction by Indian
enterprise;
company outside of India and
named Tata Steel Europe in 2010.
¾ discuss objectives of
financial management and � Tata Steel raised a debt of over $8
how they could be achieved; billion to finance the transaction.
The deal will be paid for by Tata Steel
¾ explain the meaning and UK, a special purpose vehicle (SPV)
importance of financial set up for the purpose. Another
planning; company of the Tata group, Tata
Sons Ltd., invested $ 1 billion
dollars for preference shares along
¾ state the meaning of capital
with Tata Steel which will invest an
structure;
equal amount.

¾ analyse the factors affecting � Tata Steel, the acquirer company,
the choice of an appropriate arranged about 36,500 crores of
capital structure; rupees to finance the take-over.
� Tata Steel raised this amount
¾ state meaning of fixed through debt or equity or a
capital and working capital; combination of both. Some amount
and came from internal accruals also.
This financing decision affected the
¾ analyse the factors affecting capital structure of the acquirer.
the requirement of fixed and Source: The Economic Times
working capital.
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