Jsquare Acquires thyssenkrupp Electrical Steel India for Rs 4,051.40 Crore

New Delhi, Oct 18 (PTI) Jsquare Electrical Steel Nashik has entered into a share purchase agreement to acquire 100 per cent equity shares of thyssenkrupp Electrical Steel India (tkES) for Rs 4,051.40 crore, a regulatory filing said on Friday.

Jsquare Electrical Steel Nashik Private Limited (Jsquare) is a wholly-owned subsidiary of JSW JFE Electrical Steel Private Limited (J2ES), a 50:50 joint venture of homegrown JSW Steel and JFE Steel Corporation (JFE) of Japan.

"Jsquare has entered into a share purchase agreement for the purchase of 100 per cent equity shares of tkES India, and the company (JSW Steel) has entered into other transaction-related agreements, including for the technology package, with thyssenkrupp group entities (together the Transaction Agreements)," JSW Steel said in a BSE filing said.

On Friday, JSW Steel's board also approved a proposal to acquire a 100 per cent stake in tkES jointly with JFE Steel Corporation of Japan through JV.

The purchase is for consideration for Rs 4,051.40 crore, which includes purchase consideration for the acquisition of 100 per cent of equity interest in tkES India by Jsquare Electrical Steel Nashik Private Limited (Jsquare) and purchase consideration for licensing/transfer of the associated technology package by the company.

On the rationale behind the move, JSW Steel said the acquisition is in line with the company's strategy of enhancing its proportion of value-added steel products.

Meanwhile, in a statement, thyssenkrupp said the India-Japanese consortium has won the bid for tkES India.

"Indian-Japanese buyer consortium wins bid. The closing of the transaction is expected in the next few months," it said.

The consortium is acquiring the Indian electrical steel business of thyssenkrupp for a purchase price of around 440 million euros (Rs 4,051.40 crore).

The sale of the Indian company is taking place for market-strategic reasons. "The supply of raw materials from thyssenkrupp's German steelworks to India is cost-intensive and weakens our competitiveness in India in the long term," explains Dennis Grimm, Spokesman of the Executive Board of thyssenkrupp Steel.

"Setting up our own local raw material production is not economically feasible for us. Compared to our local competitors, we will not be able to achieve the same economies of scale by supplying from Germany. This is why the sale is the right step for us at the right time," Grimm said.

tkES India is involved in the business of manufacture and sale of grain-oriented electrical steel with its facility located in Nashik, Maharashtra. It reported a turnover of Rs 1,271 crore in FY24.