December 11, 2006

Pensions Plans and Acquisitions

Link: CSN of Brazil Trumps Bid By Tata Steel for Corus Group - WSJ.com.

CSN first indicated it was preparing to make a 475 pence-a-share bid for Corus Nov. 20, but the formal bid was delayed by pension-deficit safeguard demands made by Corus pension trustees, people close to the situation told Dow Jones Newswires Friday. The pension trustees wanted CSN to improve on Tata's original offer to inject 126 million pounds to eliminate a deficit in the smaller of Corus's two main pension funds and raise contributions to the bigger fund until March 2009. CSN said it would pay 138 million pounds into the smaller scheme and increase the contribution rate on the larger scheme to 12%, from 10%, until March 31, 2009.

An acquisition can give remarkable leverage to various constitutuencies--and empower pension trustees in the process.

Posted by Anupam Chander on December 11, 2006 at 06:24 AM in Globalization | Permalink