Sajjan Jindal's JSW Steel to buy Acero Junction Holdings in $81 mn deal

Company seeks to expand operations in US with this deal, at a time when Donald Trump has imposed import tariffs on steel and aluminium

Sajjan Jindal-led JSW Steel on Thursday said it had agreed to buy 100 per cent share capital of Acero Junction Holdings for $80.85 million, as it looks to expand its operations in the US. 

Acero produces hot rolled coils, a product that is typically used in consumer durables such as refrigerators, washing machines, and automobiles. It operates a three-million tonne hot strip mill and other steel making facilities at Delaware in the US. 

The facility acquired includes an electric arc furnace, ladle metallurgy furnace, slab continuous casting machine, and a three-million tonne hot strip mill.

The Mumbai-based steel producer entered into a stock purchase agreement on Wednesday with JSM International, Acero Junction Holdings Inc, and Acero Junction Inc for the acquisition, the steel maker said in a statement.

The unaudited consolidated financial statements of Acero Junction Holdings since incorporation until the calendar year ending December 31, 2017, stands at $44.27 million, said JSW Steel. The deal is likely to be completed within the next 60 days subject to fulfilment of conditions precedent by the relevant parties.

Early this week, JSW had announced an investment of $500 million to improve capacity utilisation of its 1-million tonne plates and pipes mill in Baytown, Texas.

JSW Steel's move has gained momentum at a time when US President Donald Trump has imposed import tariffs on steel and aluminium.

Meanwhile, JSW Steel continues to look at assets across the globe, especially in the Europe. On the sidelines of the press conference held early this week with regard to investments in Texas, Joint Managing Director and Group Chief Financial Officer of JSW Steel Seshagiri Rao said, “Our plans for acqusition in Europe are on and we are still looking at it.” 

JSW Steel is among the top producers of steels in India with a total installed capacity of 18.1 million tonne. The company has been on an acquisition spree for quite some time now as it aims to touch 40 million tonne capacity by 2025.