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Construction : Web Exclusive | October 2018 | Source : CW-India

Tata Steel inks definitive agreement for Usha Martin acquisition

Tata Steel has signed definitive agreements for acquiring the steel business of Usha Martin for a cash consideration of up to Rs 43-47 billion through a slump sale, on a going concern basis. The agreements have various conditions which have to be met with, in order to close the acquisition. Any of Tata Steel’s affiliates or subsidiaries can cary out the acquisition at the closing.

Sajjan Jindal’s JSW Steel gave a stiff competition to Tata Steel for this acquisition. The promoters of Kolkata-based Usha Martin are selling the steel business to clear the group’s debt of Rs 37 billion last fiscal. Both the companies together have to work towards fulfilment of the agreement conditions precedent, which are majorly regulatory approvals needed for the transfer of the business operations.

The employees of the steel business will also get transferred as part of the acquisition. This deal will increase Tata Steel’s market share in the long products division. It is presently just around 2-3 million tonne (mt) of its total domestic capacity of 13 mt in India.

Its Kalingaganar unit is a 3-mt plant and the Jamshedpur unit has a capacity of 10 mt. Tata Steel Group, which has its presence in India, south-east Asia and Europe, has a combined production capacity of about 27.5 mt per annum.

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