Billionaire Sajjan Jindal-led JSW Steel Ltd has agreed to acquire three Italian companies including steelmaker Aferpi SpA for €55 million ($64.7 million or Rs 440 crore) to expand its overseas operations.
The Indian company will buy 100% each of Aferpi and Piombino Logistics SpA and 69.27% of GSI Lucchini SpA on a cash-free, debt-free basis from Cevitaly Srl, it said in a stock-exchange filing. Cevitaly is a wholly owned unit of Algeria’s Cevital SPA.
JSW Steel plans to fund the transaction through a combination of internal accruals and debt. The company said the deal will help it establish its presence in Italy and provide access to the European speciality steel long-products market.
The acquisition is likely to be completed within 30 days subject to the fulfilment of conditions precedent.
All the three target companies are located at Piombino in Tuscany province of Italy.
Aferpi produces special long steel products including rails, wire rods and bars. The annual capacity of its rail mill is 0.32 million tonnes, of the bar mill 0.4 million tonnes and of wire rods 0.6 million tonnes. It reported revenue of €99 million for 2017, nearly half from the previous year.
Piombino Logistics manages the logistics infrastructure of Piombino’s port area. It also manages 42 km of rail line inside the plant area. GSI Lucchini manufactures forged steel balls used in grinding mills with predominant application in mining processing. Piombino Logistics posted revenue of €3 million and GSI Lucchini €40 million for 2017.
Cevitaly, part of Algerian billionaire Issad Rebrab-led Cevital, had acquired the three companies from Italian steelmaker Lucchini in 2014, according to the statement.
According to media reports, JSW Steel had earlier tried to acquire this steel complex in 2014.
JSW Steel 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.
JSW Steel, part of the OP Jindal Group, is not new to acquisitions and has bought a number of companies over the years. In recent months, it has bid for debt-laden peers Bhushan Steel Ltd and Essar Steel.
Its most recent acquisition was in March, when it agreed to buy US-based steel mill owner Acero Junction Holdings Inc. for up to $80.85 million.