Market Overview

ArcelorMittal Partners NSSMC To Acquire Essar Steel India

Share:

ArcelorMittal MT has inked a joint venture deal with Nippon Steel & Sumitomo Metal Corporation (NSSMC) with regards to its offer to acquire Essar Steel India Limited.

On Feb 12, ArcelorMittal India Private Limited submitted a resolution plan that outlined the company's intention to formally have NSSMC join the bid to acquire Essar Steel. In case India's National Company Law Tribunal formally selects and accepts this plan, both companies will jointly acquire and manage Essar Steel.

Notably, ArcelorMittal also provided a detailed industrial and turnaround strategy in its resolution plan, which is aimed at restoring Essar Steel's fortunes, enabling it to realize its full potential and contribute in the expected growth of steel demand in India.

According to ArcelorMittal, both companies can contribute their technology and knowledge to support a swift turn-around in Essar's performance. This will not only enable it to increase production, improve product capabilities, but also meaningfully contribute to growth of India's manufacturing sector and economy development.

This is not the first time that both companies have joined forces. In 2014, ArcelorMittal and NSSMC entered into partnership to acquire AM/NS Calvert, which is a state-of-the art downstream finishing facility in Alabama. The companies made a major investment program following the acquisition, which focused on improving the facility's finishing lines to enable the production of higher-added value steel products, increase slab staging capacity and efficiency.

These investments helped AM/NS Calvert to rapidly improve its performance by increasing capacity utilization rates by more than 20%. Moreover, the shipments to the automotive sector more than doubled between 2015 and 2017 while the productivity of the hot strip mill increased by more than 1 million tons since the acquisition.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

Posted-In: contributor contributorsNews Contracts M&A

 

Related Articles (MT)

View Comments and Join the Discussion!