JSW-JFF venture to buy Thyssenkrupp Electrical Steel India for $482 million
19 Oct 2024
A joint venture of JSW Steel and Japanese steel maker JEF Steel Corp is acquiring the Indian unit of German steel giant Thyssenkrupp for Rs4,051 crore ($482.1 million) in cash, JSW Steel stated in a release on Friday.
Jsquare Electrical Steel Nashik Private Limited (J2ES), a 50:50 joint venture of JSW Steel and JFE Electrical Steel Private Limited, has agreed to purchase 100 per cent equity of Thyssenkrupp Electrical Steel India for $482.1 million, according to the JSW Steel release
The companies have also entered into related agreements, including technology transfer, according to the release.
Thyssenkrupp Electrical Steel India has its manufacturing facility in Nashik, which produces cold rolled grain oriented and cold rolled non-grain oriented electrical steel.
Grain-oriented electrical steel finds use in the manufacture of energy-efficient transformers and high performance generators.
The steel plant, however, is dependent on imported raw material, mainly supplied from Thyssenkrupp’s German steelworks, which makes steel making costly in India, according to Thyssenkrupp.
Local sourcing and production of raw material is also not economically feasible for Thyssenkrupp vis a vis local steel makers, the company pointed out as reasons for the sale.
The Sajjan Jindal-led JSW Steel had planned investment of Rs5,500 crore in Bellary, Karnataka for the production of grain-oriented electrical steel. The plant was to start operations in 2027.
The acquisition of the Thyssenkrupp would make it easier for the JSW-JFE venture to establish a well-integrated facility for manufacturing grain-oriented electrical steel in India.
ThyssenKrupp Electrical Steel India was set up in 2004, after the German steel maker bought out Raymond’s 24 per cent stake in the Nashik plant, which was originally set up by Raymond Limited.
The company employs around 500 people and reported a turnover of Rs1,271 crore in FY24.
The transaction is subject to regulatory and customary approvals.