Comments
Having lost the race to acquire Italy’s largest steel company Ilva to ArcelorMittal, Sajjan Jindal-owned JSW Group has re-initiated talks to buy Lucchini SpA, the second largest steel producer in that country.
In 2014, JSW Steel had made a bid to acquire Lucchini. However, Algeria’s Cevital Group acquired it the following year and renamed the company Aferpi (Acciaierie e Ferriere di Piombino) SpA.
Currently, JSW Steel is in talks with Cevital Group to acquire Aferpi for a valuation of $100 million (₹640 crore), sources said.
An email sent to JSW Steel officials on the Aferpi acquisition remained unanswered till the time of going to press.
With an annual steel production capacity of about 2.5 million tonne in Piombino, Lucchini was originally owned by Russia’s Severstal. The company ran into trouble in the 2008 recession that cut Europe’s steel demand by about a quarter. It was declared insolvent in 2012 and the Italian government placed Lucchini under special administration before founding a suitable buyer in Cevital Group.
Aferpi is engaged in the production of specialty long products for European railways, bars for specialised auto industry parts and wire rod mills.
The JSW Group’s talks to acquire a company in Italy comes when its promoter Sajjan Jindal has shown keen interest to produce electric cars India.
A foothold in Europe, one of the largest electric car markets, will enable the Group to gain technical knowhow on electric vehicle production and localise manufacture of components much faster, said an analyst.
Given JSW Group’s conservative approach on valuations, he said the group has made many unsuccessful bids to acquire assets abroad and India but it always stays the course on valuations.
Earlier this month, JSW Energy announced plans to invest about ₹4,000 crore to produce e-vehicles. The company is also in talks with State governments to set up plants and is holding discussions with several technology providers with plans to roll out the first electric vehicle of the group by 2020.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.