Tata is exploring takeover opportunities

If successful it would be the largest Indian takeover of a foreign company and create the world's fifth-largest steel firm.

Last week, Tata Steel, part of the Tata conglomerate, said it was looking at potential takeovers "including Corus".

The Sunday Telegraph has reported that Tata has lined up a �3.5bn ($6.5bn) financing deal for the acquisition.

Consolidation

Rapid economic growth in developing countries including China and India is creating huge demand for steel and many firms are looking to add to their steel-making assets.

But as Chinese steel production soars, other manufacturers are trying to consolidate so they can cut costs and stay competitive.

Earlier this year Mittal Steel bought rival Arcelor for $34bn, creating the world's biggest steel maker.

Tata Steel is a small steel producer by global standards, but has the backing of the giant Tata Group, one of India's largest companies with interests as diverse as carmaking, communications, tea and oil.

Corus was created after British Steel merged with Dutch firm Hoogovens in 1999 and has shed thousands of jobs in recent years.

It employs 47,300 people worldwide and reported a pre-tax profit of �580m last year.