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Here is the big breaking news. Tata Steel has won the deal for Britain’s Corus for £5.75 billion ($11.3 billion). It has beaten Brazil's CSN in a high-pitch auction that included nine rounds. Tata-Corus combine will become the world’s fifth largest steelmaker. Tata offered 608 pence a share while CSN's offer was 603 pence. The Tata bid was 34 per cent higher than its orignal bid.

The £5.75 billion deal includes £500 million of debt. The deal pegs the enterprise value of Corus at $13 billion and puts its market cap at $10.9 billion.

There is a mixed reaction to the deal. Times quotes a banker who was at the auction: “Its an amazing result...I don’t know how they can justify paying that price.”

I just listened to Wilbur Ross Jr of International Steel Group on CNBC India. He said that on the face of it the deal would look expensive. But Tata's objective is strategic and it's not from short-term trading perspective. The idea is to become a global power in steel, and a force to reckon with. Corus in the kitty will make Tata Steel the fifth largest steel player in the world.

(Via CNBC TV18): Jitesh Gadhiya of ABN Amro, the investment bankers and also the lenders to Tata Steel, said that the 2007 is going to be another bumper year for the steel industry. So the acquisition is quite strategic for Tata Steel.

Reaction: Indian stock markets have reacted negatively to the Tata-Corus deal. The Tata Steel stock is today trading 10 per cent down its previous close of Rs 519. Most of the analysts have reacted negatively to the deal for short term concerns since Tata Steel is not going to make money very soon from this deal. In the long term, of course, analysts are positive. CLSA has downgraded Tata Steel to a "Sell" from an "Outperformer."

Click here for the Tata Steel release on the revised bid.