JSW Steel has partnered with JFE Steel Corporation of Japan, creating a 50:50 joint venture valued at INR 31,500 crore. JSW will transfer its Bhushan Power and Steel Limited (BPSL) steel business into this JV through a slump sale valued at INR 24,483 crore. JFE will invest INR 15,750 crore, securing a 50% stake, leveraging JFE’s tech expertise and JSW’s project capabilities.
Joint Venture Announcement
JSW Steel Ltd has announced a strategic joint venture with JFE Steel Corporation of Japan. This partnership involves the Steel business undertaking of Bhushan Power and Steel Limited (BPSL), becoming a 50:50 joint venture.
Financial Details of the Transaction
JSW will transfer the BPSL steel business to the joint venture via a slump sale. The cash consideration for this sale is INR 24,483 crore. JFE will invest a total of INR 15,750 crore in two tranches to acquire a 50% stake in the joint venture at an equity value of INR 31,500 crore.
Strategic Rationale
The purpose of this transaction is to ensure that JSW is positioned to capitalize on India’s growth opportunity. JSW aims to achieve a steel-making capacity of 50 mtpa by FY 2031. This transaction should secure growth in a financially prudent manner.
Benefits of the Partnership
By partnering with JFE Steel, JSW gains a trusted, long-term strategic partner. JFE will bring technological expertise. Together with JSW Steel’s project execution and operational excellence, this will create further value for the joint venture. JSW will remain invested in the joint venture and participate in future value creation.
Statements from Leadership
Mr. Jayant Acharya, Joint Managing Director and CEO of JSW Steel Ltd., stated that JFE has been a trusted partner since 2009. He believes that combining JSW’s expertise in India with JFE’s technological strengths will enable the joint venture to realize its growth potential.
Mr. Masayuki Hirose, President and CEO of JFE Steel Corporation, noted that their relationship with JSW is entering a new phase. He is confident that jointly operating an integrated steel plant in India with JSW will contribute to the growth of both companies.
JSW Steel’s Sustainability Initiatives
JSW Steel aims to reduce its CO2 emissions by 42% from its steel-making operations by 2030 and has committed to achieving net-neutral carbon emissions for all operations under its direct control by 2050.
Source: BSE