But the Tatas did not blink; Brazilian rival CSN did. Operation Colour, as the project had been codenamed, had been completed successfully.

The facts. Tata Steel has outbid Cia. Siderurgica Nacional SA to acquire Anglo-Dutch steelmaker Corus Group Plc for $12.1 billion in the largest acquisition ever by an Indian company. The hammer favoured the Indian company’s aggressive bid of 608 pence a share, knocking out the Brazilians’ final offer of 603 pence. The acquisition will create a company with combined revenues of $24.4 billion (Rs 1,09,800 crore), with two-third of sales in Europe, and lift Tata Steel to 5th from 56th in global steel rankings. It will also make the Tata group the largest business entity in India with combined revenues of Rs 1,85,350 crore.

A fitting achievement, certainly, in Tata Steel’s centenary year. For, it was in 1907 that Jamsetji Tata decided to set up his steel plant at Sakchi village at the confluence of the Sybarnarekha and Kharkai rivers, and floated the Tata Iron and Steel Company.

Addressing a press conference in Mumbai on Wednesday morning, Ratan Tata said: “I believe this will be the first step in showing that Indian industry can in fact step outside the shores in an international marketplace and assert itself as a global player.” He had now put to rest doubts whether Tata Steel, one-third the size of Corus, could actually pull off such an audacious deal. Tata had raised his bid by 34% from his initial offer of 455 pence during the three-month takeover battle to make the second-biggest purchase ever in the history of steel, after Mittal Steel’s $38.3-billion takeover of Arcelor SA last year.

The deal values Corus at $12.1 billion (Rs 54,450 crore) in terms of equity and an enterprise value of $13.65 billion, which is roughly nine times Corus’s earnings before interest, tax, depreciation and amortisation, or EBITDA, based on the Anglo-Dutch steelmaker’s earnings in the 12 months ended Sept 30, 2006. Tata Steel managing director B Muthuraman said the deal would immediately give Tata Steel additional capacity of 19 million tonnes at half the cost of building new plants.

“It would take several years to build a 19-million tonne enterprise from scratch, leave alone establishing it in Europe with a brand name,” echoed Tata. Synergies in terms of raw material procurement, shared services and combined distribution networks would add $300-350 million a year to net profit in about three years, explained Muthuraman.

The markets, though, reacted sharply to the high valuation, leading to the slide of Tata Steel stock by 10.66% to close at Rs 463.95 on Wednesday on the BSE. Standard & Poor’s Ratings Services said it maintained its negative ‘BBB’ long-term corporate rating for Tata Steel. Meanwhile, CSN stock rose 6.2% on the Bovespa exchange.

Describing the market reaction as a short-term and “harsh” view, Tata said, “We need to understand that we are at the peak of the business cycle and this is not out of line with transactions of similar nature. We would never go beyond a point of prudence.”

Addressing a media briefing in London, Corus chairman Jim Leng said, “Tata and Corus are stronger together and will be able to compete effectively in an increasingly global environment. This combination creates a strong and robust platform for growth that will benefit all stakeholders.”

Now, a new story begins for the Tatas, for India Inc, and for global steel.