JSW Steel rose 1.25% to Rs 356.15 after the company said its subsidiary entered into an agreement to acquire steel facilities at Piombino, Italy.
JSW Steel Italy, the company's subsidiary, entered into a share purchase agreement (SPA) dated 21 December 2020 with Industrial Development Corporation (IDC), South Africa, for acquisition of 30.73% share capital of GSI Lucchini for a cash consideration of 1 million euros. The balance 69.67% of GSI is held by JSW Steel Italy. GSI's manufacturing unit is located in Piombino, Tuscany Region in Italy.
IDC is owned by the Government of South Africa under the supervision of the Department of Trade Industry and Competition.
GSI is a producer of forged steel balls used in grinding mills with predominant application in mining processing. GSI facilities are located within the premises of Piombino plant, providing easy access to export markets through the port of Piombino.
Offering the acquisition rationale, JSW Steel said that the proposed transaction provides a unique opportunity for JSW to consolidate its stake in GSI. The GSI Lucchini brand is widely recognized in Europe and Africa and is among the prominent Grinding Media supplier in African Mines.
The port-based facility located at Piombino, makes GSI uniquely positioned for exports market, which allows specific advantages in terms of lead time, service level, and logistics cost in its target markets. The facility also gives GSI the flexibility and access to import raw material's bars/blooms and billets to supplement supplies as when required.
"The Transaction is subject to fulfilment of conditions precedent and other terms mentioned in the SPA," the company said in a statement.
JSW Steel, a flagship company of the JSW Group, is an integrated steel manufacturer in India with an installed steel-making capacity of 18 million tonnes per annum (MTPA).
On a consolidated basis, the steel major's net profit declined 37.77% to Rs 1,593 crore on 9.63% increase in revenue from operations to Rs 19,264 crore in Q2 September 2020 over Q2 September 2019.
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