Tuesday, July 27, 2010

Japan’s JFE Steel Corp. acquired stakes in Indian JSW Steel

On July 27, 2010, JFE Steel Corporation, Japan’s second largest and world’s fifth-largest steel maker, said that it will acquire 14.99 percent stake in JSW Steel, the second largest steel maker of India.

In a statement issued by JFE Steel it said, ''JFE Steel will acquire a stake in JSW Steel by subscribing to a preferential allotment at a cost of Rs48 billion. The company plans to acquire 14.99 per cent voting rights and will make additional investments if the forthcoming acquisition does not reach this figure due to reasons including but not limited to possible fluctuations in JSW Steel's share price.''

For Tokyo-based JFE Steel, this is the second major overseas acquisition in two days. On July 26, 2010, the company announced to have acquired 24 percent stakes in Pancheng Yihong Pipe, a Sichuan, China-based company that processes high-quality seamless steel pipes.

Both the companies entered into a long term agreement. Through this acquisition, JSW would be able to get into the growing Indian market at the same time JSW Steel would have access to funds for expansion and technology from JFE steel.

JFE Steel would play a major role in building up JSW Steel plant in West Bengal which is currently on hold due to fund shortage.

No comments:

Post a Comment