JSW Steel has entered into a share purchase agreement to acquire 100% equity shares of thyssenkrupp Electrical Steel (tkES) through a 50:50 joint venture with Tokyo-headquartered JFE Steel for Rs 4,051.4 crore, the Sajjan Jindal-led steel company announced to the exchanges on Friday evening.
The acquisition will be executed through Jsquare Electrical Steel Nashik, a subsidiary of JSW JFE Electrical Steel, in which JSW Steel holds a 50% stake, with the remaining share held by JFE Steel. The transaction is structured as an all-cash deal.
“The purchase consideration for the Transaction is Rs 4,051.40 crore, which includes the purchase consideration for acquisition of 100% of equity interest in tkES India by Jsquare Electrical Steel Nashik (“Jsquare”) and the purchase consideration for licensing/transfer of the associated technology package by the company,” JSW Steel said in its notification to the exchanges.
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Headquartered in Mumbai, tkES is engaged in the manufacture and sale of grain-oriented electrical steel, with a turnover of Rs 1,271 crore as of March 31. Its manufacturing facility is based in Nashik, and the company was founded in 2000.
The transaction is anticipated to be completed within 8 months from the signing date.
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“The completion of the transaction is subject to receipt of regulatory approval and satisfaction of customary conditions precedent as per Transaction Agreements,” JSW Steel noted.
The company emphasised that this acquisition aligns with its strategy of increasing the proportion of value-added steel products in its portfolio. JFE Steel, the second-largest steelmaker in Japan after Nippon Steel, is owned by JFE. JFE Steel’s executive vice president Hiroyuki Ogawa serves as a nominee director on the board of JSW Steel.
In February, JSW Steel announced plans to establish a grain-oriented electrical steel manufacturing facility through a joint venture with JFE Steel, with a planned investment of Rs 5,500 crore. The JV aims to develop a grain-oriented steel manufacturing base in Bellary,
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