Anglo-Dutch steelmaker Corus has ditched a planned merger with a Brazilian rival and warned an anticipated market recovery was proving slower than expected, sending its shares crashing 20 per cent.
Corus said the decision to call off the proposed merger with Brazil's Companhia Siderurgica Nacional (CSN) was final. It said the volatile Brazilian currency and risk-adverse lenders in uncertain economic times had played a part in the decision.
Some analysts said the collapse of the deal left Corus stranded strategically, with a high cost base in Europe and the prospect of cheap Brazilian iron ore ruled out.
Shares in London were 21 per cent, or 9-3/4 pence, lower at 37p. The stock was 19.2 per cent lower at €0.59 on the Amsterdam stock exchange.
Adding to the group's woes, Corus said an anticipated recovery would be slower than expected as demand for end products like steel cladding for the construction industry waned, sparking pricing pressure.
It said it would likely report a second-half operating loss, before exceptionals, of around £152 million sterling, compared to the first-half loss of £252 million.