Sajjan Jindal-led JSW Steel Ltd has agreed to buy 100 per cent stake in US-based Acero Junction Holdings for $80.85 million in a bid to expand its operations in the United States.
According to a filing to the stock exchanges, JSW Steel entered into a stock purchase agreement with JSM International Ltd, Acero Junction Holdings Inc. and Acero Junction Inc. for the acquisition.
Acero produces hot rolled coils, a product that is typically used in consumer durables such as refrigerators, washing machines, and automobiles. It operates a 3 million tonne hot strip mill and other steel making facilities at Delaware in the US.
The transaction is expected to be completed in the next two months.
This acquisition comes close on the heels of JSW announcing an investment of $500 million to improve capacity utilisation of its 1-million tonne plates and pipes mill in Baytown, Texas. The move is in line with the US government’s push to promote steel production in the country and reduce reliance on imports. The government recently imposed a stiff tariff on steel and aluminium imports.
JSW Steel is one of the leading steel manufacturers of India. It makes flat and long-steel products such as hot-rolled coils, cold-rolled coils, galvanised products, colour-coated products, autograde flat products, bars and rods. It has an installed capacity of 18 million tonnes per annum.
The company has been keenly tapping the inorganic route for its expansion. It was recently reported that JSW Steel was looking to approach overseas bond investors to raise $1 billion to fund its plan to buy distressed assets in India.
Source: Dalal Street Asia
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