JSW Steel, which is attempting a last-minute bid for the stressed assets of Essar Steel, is set to sign a deal with Algeria-headquartered Cevital to acquire Aferpi Spa (formerly known as Lucchini SpA) for about ₹440 crore.

The deal is expected to be signed early on Saturday, said sources close to the development.

Cevital is Algeria’s largest privately owned conglomerate, with interests in agri-food, retail, industry and services.

Senior officials of JSW Steel are in Italy, and an agreement will be signed in that country’s Ministry of Economic Development, the sources added.

JSW Steel was eyeing Italy’s two largest steel producers, Ilva and Lucchini, which went belly up due to the sudden contraction in demand after the 2008 economic recession in Europe. In 2012, they were declared bankrupt and put on the block.

The Indian firm’s bids were not aggressive enough — it lost Ilva to ArcelorMittal and Lucchini to the Cevital Group.

Last August, it initiated talks with Cevital to buy out Lucchini, subsequently renamed Aferpi (Acciaierie e Ferriere di Piombino).

 

The deal will help JSW Steel expand its reach in the European specialty steel market, particularly in the automobile sector.

Originally owned by Russia’s Severstal, Aferpi has an annual steel production capacity of 2 million tonnes in Piombino, and makes the specialty steel used in railways, automobiles and earth-moving vehicles, among other applications.

 

Electric car push

JSW Steel’s acquisition comes at a time when group company JSW Energy is gearing up for electric-car production in India.

A foothold in Europe, one of the largest electric-car markets, will help it gain knowhow and localise the manufacture of components much faster, said an analyst.

 

 

 

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