Tata Steel to acquire Usha Martin's steel biz for up to Rs4,700 cr
24 September 2018
Tata Steel on Saturday will acquire the steel business of Usha Martin Limited (UML) for Rs4,300-4,700 crore.
In a release issued on Saturday, Tata Steel Limited said it has signed of definitive agreements for acquisition of the steel business of Usha Martin Limited through a slump sale on a going concern basis.
“It is proposed that the steel business of UML will be acquired subject to transaction closing, for a cash consideration of between Rs 4,300-4,700 crore (subject to various transaction adjustments),” the release said.
UML, in a stock exchange filing, said the sale of steel business to Tata Steel will help the company in “significant reduction” of its debt.
Tata Steel said the closing of the acquisition is subject to fulfilment of various conditions under the agreements and that at the closing, Tata Steel or any of its subsidiaries or affiliates may carry out this acquisition.
The deal is expected to be completed in 6-9 months, it added.
While the two parties jointly work towards fulfilment of conditions precedent, Tat Steel said it is largely regulatory approvals that are required for the transfer of the business undertaking.
Tata Steel will absorb all the employees of UML’s steel business as part of the acquisition.
The steel business undertaking of UML inter-alia comprises a specialized 1 million tonnes per annum alloy based manufacturing capacity in long products segment based in Jamshedpur, a producing iron-ore mine, a coal mine under development and captive power plants.
Tata steel said the acquisition is part of its overall strategy to build capability in long products and expand product offerings, including high-value added products.
Tata Steel Group is among the top global steel companies with an annual crude steel capacity of 27.5 million tonnes per annum (MTPA) as of 31 March 2018.
Usha Martin is amongst the largest wire rope manufacturers in the world and a leading speciality steel producer in India.
Earlier, in May, Bamnipal Steel Ltd, a wholly-owned subsidiary of Tata Steel, completed the acquisition of controlling stake of 72.65 per cent in Bhushan Steel Ltd (BSL).
Tata Steel had won the bid to acquire debt-laden BSL in an insolvency auction.