JSW Steel in pact to buy Italian special steel maker for Rs 440 cr
19 May 2018
Domestic steel major JSW Steel today said it has signed an agreement with Algeria-based Cevital to acquire its Italian arm Aferpi, a specialised steel products maker, for about Rs 440 crore.
The acquisition of Aferpi, which owns the second largest steel plant in Italy, will help JSW expand its reach in the specialised steel market, particularly in the automobile sector, the Indian steel maker said in a statement.
The deal would also provide JSW a foothold for future opportunities in the European markets, the Sajjan Jindal-owned firm further said.
JSW Steel Italy Srl, a subsidiary of JSW Steel, has entered into a sale and purchase agreement dated May 17, 2018, with Cevitaly Srl for acquisition of 100 per cent shares of Aferpi SpA (Aferpi), Piombino Logistics SpA and 69.27 per cent of the share capital of GSI Lucchini SpA for a cash consideration of Euro 55 million on a cash free, debt free basis, JSW Steel said.
JSW Steel had earlier tried to acquire the Italian plant in 2014, when it was known as Lucchini. The Algerian conglomerate Cevital, however, acquired Lucchini and renamed it Acciaierie e Ferriere di Piombino (Aferpi).
The Indian steel maker said the transaction is subject to fulfilment of conditions precedents and other customary terms generally applicable to such transactions as per the SPA.
Aferpi makes a wide range of quality and special steel for rails, wire rods and bars for railway, automotive, earthmoving vehicles, energy, fastening, springs and welding.
At present, it is working on projects that involve production of 1 million tonne (MT) of long steel products and revamping of wire rod and bar mills, installation of one electric arc furnace of 1 MT capacity with two continuous casting machines.
Besides, it is working on installation of a new rails- and beams-rolling plant and installation of the second electric arc furnace and the third continuous casting machine.
JSW Steel is planning to increase its manufacturing capacity to 40-45 million tonne by 2030 from the present 18 million tonne.
"If the country builds 300 MT capacity by 2030, we would like to plan accordingly to maintain our 15 per cent share, which will be 40-45 MT," JSW Steel joint managing director and group CFO Seshagiri Rao had said earlier.